Departmental Distribution of Actual OverheadStep Method. The Minzell Mining Corporation has produc ing departments A and B.
Question:
Departmental Distribution of Actual Overhead—Step Method. The Minzell Mining Corporation has produc¬ ing departments A and B. and service departments C. D. E. and F. Costs are distributed from F first. D sec¬ ond, C third, and E fourth. It is the company's policy' that once a service department's costs have been allocated, no costs from other service departments are to be allocated to it. F distributes one half of its costs to A and the remainder to D and E on the basis of the number of employees. D distributes its costs on the basis of investment in equipment, C's are assigned to B. and E’s are distributed on the basis of floor space. The following infonnation pertains to the month just ended:
Department Cost Square Feet Employees Investment in Equipment A.
$15,000 2,000 40
$170,000 B.
12,000 3,000 20 80,000 C.
12,000 4,000 20 130,000 D.
8,000 2,000 30
% 70,000 E.
2,000 1,500 20 50,000 F.
2,000 2,500 10 30,000 Total.
$51,000 15,000 140
$530,000 Required: Distribute service department overhead.
Step by Step Answer:
Cost Accounting
ISBN: 9780538828079
11th Edition
Authors: Lawrence H. Hammer, William K. Carter, Milton F. Usry