(APPENDIX 16B) SEQUENTIAL METHOD Lanoka Company manufactures pottery in two producing departments: Shaping and Firing. Three support...
Question:
(APPENDIX 16B) SEQUENTIAL METHOD Lanoka Company manufactures pottery in two producing departments: Shaping and Firing. Three support departments support the following production departments:
Power, General Factory, and Human Resources. Budgeted data on the five departments are as follows:
Support Departments Producing Departments Power General Factory Human Resources Shaping Firing Direct overhead costs $90,000 $167,000 $84,000 $75,000 $234,000 Kilowatt-hours — 13,000 25,000 30,000 70,000 Square feet 2,000 — 6,000 24,000 8,000 Direct labor hours —— — 4,000 6,000 Power is allocated on the basis of kilowatt-hours, general factory is allocated on the basis of square footage, and human resources is allocated on the basis of direct labor hours. The company does not break overhead into fixed and variable components.
Required:
. Calculate the cost assignment ratios to be used under the sequential method for power and general factory.
. Allocate the overhead costs to the producing departments by using the sequential method.
Exercises Exercise
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen