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umka2103 [35]
3 years ago
6

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 $170,000 $1,490,000 $670,000 Square feet 40 5,000 600 2,400 Number of employees 8 3 36 4 Allocate the support department costs to the production departments using the direct method.
Business
1 answer:
OLEGan [10]3 years ago
8 0

Answer:

Using the direct method, total cost allocated to Cutting Department is $211,333 while total cost allocated to Assembly Department is $278,667.

Explanation:

Step 1: Calculation of the allocation of costs from Janitorial Department to Cutting and Assembly Departments

For Janitorial Department, square meter is used as the relevant basis of allocation and the following formula will be used:

Cost allocated to a Department = (Department’s Square meter ÷ Total Square meter) × Total cost of the Department being allocated

Therefore,

Janitorial Department Cost allocated to Cutting Department = (26 ÷ 30) × $170,000 = $64,000

Janitorial Department Cost allocated to Assembly Department = (4 ÷ 30) × $170,000 = $256,000

Step 2: Calculation of the allocation of costs from Cafeteria Department to Cutting and Assembly Departments

For Cafeteria Department, number of employee is used as the relevant basis of allocation and the following formula will be used:

Cost allocated to a Department = (Department’s number of employees ÷ Total Square meter) × Total cost of the Department being allocated

Therefore,

Cafeteria Department Cost allocated to Cutting Department = (600 ÷ 3,000) × $320,000 = $147,333  

Cafeteria Department Cost allocated to Assembly Department = (2,400 ÷ 3,000) × $320,000 = $22,667

Step 3: Calculation of Total Cost Allocated to each department

Total cost allocated to Cutting Department = $64,000 + $147,333 = $211,333

Total cost allocated to Assembly Department = $256,000 + $22,667 = $278,667

Conclusion

Therefore, using the direct method, total cost allocated to Cutting Department is $211,333 while total cost allocated to Assembly Department is $278,667.

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3 years ago
From an economic context, select the correct definition of a market.
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Answer:

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Case Products manufactures two models of DVD storage cases: regular and deluxe. Presented is standard cost information for each
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Solution :

                                          \text{CASE PRODUCTS}

                      \text{Manufacturing Activities Performance Report}

                                      \text{ (For the Month of July)}

Particulars           \text{Actual}      \text{Flexible budget }      \text{Flexible budget Variance}

Volume

\text{Regular}               8000             8000

\text{Deluxe }               3500             3500

Variable cost

Direct material

Acrylic sheet

Regular                                    $288,000

Deluxe                                     $210,000

Assembly kits

Regular                                     $40,000

Deluxe                                     $17,500

Total                $561,300         $555,500            $5800                       U

Direct Labor

Regular                                       $80,000

Deluxe                                        $52,500

Total                130,800              $132,500          $1700                         F

Variable overhead

Regular                                        $20,000

Deluxe                                         $13,125

Total              $34,625               $33,125            1500                            U

Fixed overhead 48,150            $46,000             2150                           U

Total              $774,875             $767,125           7750                            U

<u />

<u>Working</u>

                                                                                 Regular          Deluxe

                                                                                8000                3500

Direct Material:

Acrylic sheets(8000 x 36);(3500 x 60)                $288,000         $210,000

Assembly kit (8000 x 50); (3500 x 5)                   $40,000           $ 17500

Direct labor  

(8000 x 10) ; (3500 x 15)                                        $80,000            $52,500

Variable overhead

(8000 x 2.50);( 3500 x 3.75)                                 $ 20,000           $ 13,125

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