Question

Departmental information for the four departments at Samoa Industries is provided below. ​ ​ Total Cost Cost Driver Square Feet Number of Employees Janitorial $ 150,000 Square footage serviced 200 40 Cafeteria 50,000 Number of employees 20,000 12 Cutting 1,125,000 ​ 4,000 120 Assembly 1,100,000 ​ 16,000 40 The Janitorial and Cafeteria departments are support departments. Samoa uses the sequential method to allocate support department costs, first allocating the costs from the Janitorial Department to the Cafeteria, Cutting, and Assembly departments. Determine the proportional (percentage) usage of the Janitorial Department by the (a) Cafeteria, (b) Cutting, and (c) Assembly departments.

Answer 1

Answer:

a) The proportional (percentage) usage of the Janitorial Department by the Cafeteria, would be 50%

b) The proportional (percentage) usage of the Janitorial Department by the cutting would be 10%

c) The proportional (percentage) usage of the Janitorial Department by the Assembly would be 40%

Explanation:

In order to calculate the proportional (percentage) usage of the Janitorial Department by the (a) Cafeteria, (b) Cutting, and (c) Assembly departments, we would have to calculate first the amount of the janitorial department costs to be allocated to the (a) Cafeteria, (b) Cutting, and (c) Assembly departments, as follows:

Cafetaria

=150000×20000/(20000+4000+16000)

=$75,000, Hence the proportional (percentage) usage of the Janitorial Department by the Cafeteria, would be 50%

Cutting

=150000×4000/(20000+4000+16000)

=$15,000, Hence the proportional (percentage) usage of the Janitorial Department by the cutting would be 10%

Assembly

=150000×16000/(20000+4000+16000)

=$60,000,Hence the proportional (percentage) usage of the Janitorial Department by the Assembly would be 40%