Question
In: Accounting
The following information is departmental cost allocation with two service departments and two production departments. Percentage...
The following information is departmental cost allocation with two service departments and two production departments.
|
Percentage Service Provided to |
|||||||||||||||
| Department | Cost | S1 | S2 | P1 | P2 | ||||||||||
| Service 1 (S1) | $ | 30,000 | 0 | % | 30 | % | 35 | % | 35 | % | |||||
| Service 2 (S2) | 20,000 | 20 | 0 | 20 | 60 | ||||||||||
| Production 1 (P1) | 100,000 | ||||||||||||||
| Production 2 (P2) | 150,000 | ||||||||||||||
REQ1. What is the amount of service department cost allocated to P1 and P2 using the direct method?
REQ2. What is the total cost in P1 and in P2 after allocation using the direct method?
REQ3. What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
REQ4. What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $100,000 to $120,000?
Solutions
Expert Solution
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| Answer 1 and 2- Direct Method | S 1 | S 2 | P 1 | P 2 | Total |
| S 1 | 35.00% | 35.00% | 70.00% | ||
| S 1 % | 50.00% | 50.00% | 100.00% | ||
| S 2 | 20.00 | 60.00 | 80.00 | ||
| S 2 % | 25.00% | 75.00% | 100.00% | ||
| Total costs | 30,000.00 | 20,000.00 | 100,000.00 | 150,000.00 | 300,000.00 |
| S 1 costs allocated | (30,000.00) | 15,000.00 | 15,000.00 | - | |
| S 2 costs allocated | (20,000.00) | 5,000.00 | 15,000.00 | - | |
| Total cost after allocation | - | - | 120,000.00 | 180,000.00 | 300,000.00 |
| Answer 3- Step Method | S 1 | S 2 | P 1 | P 2 | Total |
| S 1 | 30% | 35.00% | 35.00% | 100% | |
| S 1 % | 30.00% | 35.00% | 35.00% | 100.00% | |
| S 2 | 20.00 | 60.00 | 80.00 | ||
| S 2 % | 25.00% | 75.00% | 100.00% | ||
| Total costs | 30,000.00 | 20,000.00 | 100,000.00 | 150,000.00 | 300,000.00 |
| S 1 costs allocated | (30,000.00) | 9,000.00 | 10,500.00 | 10,500.00 | - |
| Total | - | 29,000.00 | 110,500.00 | 160,500.00 | 300,000.00 |
| S 2 costs allocated | - | (29,000.00) | 7,250.00 | 21,750.00 | - |
| Total cost after allocation | - | - | 117,750.00 | 182,250.00 | 300,000.00 |
| Answer 4- Direct Method | S 1 | S 2 | P 1 | P 2 | Total |
| S 1 | 35.00% | 35.00% | 70.00% | ||
| S 1 % | 50.0% | 50.0% | 100.00% | ||
| S 2 | 20.00 | 60.00 | 80.00 | ||
| S 2 % | 25.00% | 75.00% | 100.00% | ||
| Total costs | 30,000.00 | 20,000.00 | 120,000.00 | 150,000.00 | 320,000.00 |
| S 1 costs allocated | (30,000.00) | 15,000.00 | 15,000.00 | - | |
| S 2 costs allocated | (20,000.00) | 5,000.00 | 15,000.00 | - | |
| Total cost after allocation | - | - | 140,000.00 | 180,000.00 | 320,000.00 |
ekkarill92 answered 1 year agoRelated Solutions
The following information is departmental cost allocation with two service departments and two production departments. Percentage...
The following information is departmental cost allocation with
two service departments and two production departments.
Percentage Service Provided to
Department
Cost
S1
S2
P1
P2
Service 1 (S1)
$
42,000
0
%
25
%
45
%
30
%
Service 2 (S2)
32,000
20
0
20
60
Production 1 (P1)
220,000
Production 2 (P2)
270,000
What is the amount of service department cost allocated to P1
and P2 using the direct method?
Exercise 7-29 Departmental Cost Allocation [LO 7-3] Robinson Products Company has two service departments (S1 and...
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Robinson Products Company has two service departments (S1 and
S2) and two production departments (P1 and P2). The distribution of
each service department’s efforts (in percentages) to the other
departments is:
From
To
S1
S2
P1
P2
S1
—
20
%
30
%
?
%
S2
20
%
—
?
40
The direct operating costs of the departments (including both
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S1
$
170,000
S2
64,000
P1
51,000
P2...
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Andy Corp. has two service departments and two operating
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for these departments for last year are as follows: Service
Departments Operating Departments Personnel Maintenance Assembly
Machining Departmental costs $144,000 $84,000 $12,000 $34,000
Number of employees 35 30 90 60 Machine-hours 0 0 330 170 Personnel
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Maintenance costs are allocated second on the...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...
Andy Corp. has two service departments and two operating
departments. The company allocates service departmental costs to
operating departments using the step-down method. Operating data
for these departments for last year are as follows:
Service Departments
Operating Departments
Personnel
Maintenance
Assembly
Machining
Departmental costs
$144,000
$84,000
$12,000
$34,000
Number of employees
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210
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HomeLife Life Insurance Company has two service departments
(actuarial and premium rating) and two production departments
(advertising and sales). The distribution of each service
department’s efforts (in percentages) to the other departments is
shown in the following table:
To
From
Actuarial
Premium Rating
Advertising
Sales
Actuarial
—
80
%
10
%
10
%
Premium
20
%
—
20
60
The direct operating costs of the departments (including both
variable and fixed costs)...
In order to allocate service departments' costs to production departments, there are three allocation methods (direct,...
In order to allocate service departments' costs to production
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X Company is considering switching to a departmental allocation system. It has two departments, and would...
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Multiple Choice
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cost would be allocated to In-patient Treatment.
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cost would be allocated to...
Question 4: Service department cost allocation Inns Battery Company has two service departments: Maintenance and Personnel....
Question 4: Service department cost
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Inns Battery Company has two service departments: Maintenance
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allocated based on the number of employees. Data on budgeted
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Support Departments
Production Departments
Maintenance Department
Personnel Department
A
B
Budgeted costs
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$30,000
$80,000
$120,000
Budgeted maintenance-hours
n/a
240
720
240
Number of employees
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n/a
60
120
Required:
4a....
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