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Support department cost allocation—direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two...

Support department cost allocation—direct method

Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:

Support Department Cost Driver
Janitorial Department Square footage to be serviced
Cafeteria Department Number of employees
Janitorial
Department		 Cafeteria
Department		 Cutting
Department		 Assembly
Department
Department costs $320,000    $190,000 $1,520,000    $690,000
Square feet 46 5,000 1,200 4,800
Number of employees 12 3    24 6   

Allocate the support department costs to the production departments using the direct method.

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Allocate the support department costs to the production departments using the direct method:
Support Departments Production Departments
Particulars Janitorial department Cafeteria department Cutting department Assembly department Total
Department Costs before allocation $ 3,20,000 $     1,90,000 $15,20,000 $        6,90,000 $27,20,000
Allocation:
Janitorial department (1200:4800) $ -3,20,000 - $     64,000 $        2,56,000 $ 3,20,000
Cafeteria department (24:6) $    -1,90,000 $ 1,52,000 $           38,000 $ 1,90,000
Total cost after Allocation - - $17,36,000 $        9,84,000 $27,20,000

ekkarill92 answered 3 years ago
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