Departmental Distribution of Estimated OverheadSimultaneous Method. The estimated departmental factory overhead for producing departments S and T
Question:
Departmental Distribution of Estimated Overhead—Simultaneous Method. The estimated departmental factory overhead for producing departments S and T and the estimated costs of service departments E. F, and G (before any service department allocations) are:
Producing Department Service Department S. $60,000 E. S20.000 T. 90,000 F. 20,000 G. 10,000 The interdependence of the departments is as follows:
Services Provided By Department E
F G
Producing—S.
. —
30%
40%
Producing—T.
. 50%
40 30 Service—E.
. —
20
—
Service—F.
. 20
—
—
Service—G.
. 30 10
—
Marketing.
. —
—
20 General Office.
. —
—
10 100%
100%
100%
Required:
(1) Compute the final amount of estimated overhead of each service department after reciprocal transfer costs have been calculated algebraically.
(2) Compute the total factory overhead of each producing department and the amount of Department G cost assigned to the Marketing Department and to General Office.
Step by Step Answer:
Cost Accounting
ISBN: 9780538828079
11th Edition
Authors: Lawrence H. Hammer, William K. Carter, Milton F. Usry