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
| Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks! |
| 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...
Exercise 7-29 Departmental Cost Allocation [LO 7-3]
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
variable and fixed costs) are:
S1
$
170,000
S2
64,000
P1
51,000
P2...
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 35 30 90 60 Machine-hours 0 0 330 170 Personnel
costs are allocated first on the basis of number of employees and
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
35
30
90
60
Machine-hours
0
0
210
290
Personnel costs are allocated first on the basis of number of
employees and Maintenance costs are allocated second on the...
Exercise 7-28 Departmental Cost Allocation [LO 7-3, 7-5] HomeLife Life Insurance Company has two service departments...
Exercise 7-28 Departmental Cost Allocation [LO 7-3, 7-5]
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
departments, there are three allocation methods (direct, step-down,
and reciprocal). Use your own example to show the calculation and
difference among these methods.
X Company is considering switching to a departmental allocation system. It has two departments, and would...
X Company is considering switching to a departmental allocation
system. It has two departments, and would use direct labor hours as
the cost driver in Department 1 and machine hours as the cost
driver in Department 2. The following are budgeted costs and driver
amounts for these two departments in 2017: Department 1 Department
2 Direct materials $16,700 $47,200 Direct labor $640,000 $640,000
Overhead $110,000 $88,000 Direct labor hours 40,000 40,000 Machine
hours 100,000 130,000 Assume the following information for...
Support Department and Joint Cost Allocation All firms have support or service departments to support production...
Support Department and Joint Cost Allocation
All firms have support or service departments to support
production activities. As addressed in earlier modules, those costs
must be allocated to product costs. Sometimes a single
manufacturing process produces an output that can then be further
manufactured into several other products. The costs of the initial
manufacturing process must be allocated to the subsequent
products.
Module 06: Critical Thinking Assignment
CRITICAL THINKING ASSIGNMENT
Complete the following three questions using Microsoft Excel. No
other...
The Buckaneer Clinic has two service departments (Human Resources and Information Resources) and two "production" departments...
The Buckaneer Clinic
has two service departments (Human Resources and Information
Resources) and two "production" departments (In-patient Treatment
and Out-patient Treatment). The service departments service the
"production" departments as well as each other, and studies have
shown that Information Resources provides the greater amount of
service. Which of the following allocations would occur if
Buckaneer uses the direct method of cost allocation?
Multiple Choice
Information Resources
cost would be allocated to In-patient Treatment.
Information Resources
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
allocation
Inns Battery Company has two service departments: Maintenance
and Personnel. Maintenance Department costs are allocated on the
basis of budgeted maintenance-hours. Personnel Department costs are
allocated based on the number of employees. Data on budgeted
maintenance-hours and number of employees are as follows:
Support Departments
Production Departments
Maintenance Department
Personnel Department
A
B
Budgeted costs
$180,000
$30,000
$80,000
$120,000
Budgeted maintenance-hours
n/a
240
720
240
Number of employees
20
n/a
60
120
Required:
4a....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain the use of neural networking modeling in predictive analytics. Discuss a real-life example of where...
- Boarder line and antisocial disorder are perhaps the most research personality disorder.What are the most common...
- Read at least 2 academically reviewed articles and Write an annotated bibliography paper on Master Budgeting
- Why normalization and referential integrity are important principles when designing relational databases?
- Respond to the following in a minimum of 175 words: Discuss what elements should be present...
- 1) The 3rd bright fringe of a double slit interference pattern is 30.0 cm above the...
- A solar cell generates a potential difference of 0.320 V when a 445.0 ? resistor is...
ADVERTISEMENT