Question
Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:
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 | $310,000 | $169,000 | $1,504,000 | $680,000 |
Square feet | 50 | 5,000 | 1,000 | 4,000 |
Number of employees | 10 | 3 | 30 | 10 |
Allocated the support department costs to the production departments using the direct method below.
Cutting Department | Assembly Department | ||
Janitorial Department cost allocation | $62,000 | $248,000 | |
Cafeteria Department cost allocation | $126,750 | $42,250 |
Allocated the support department costs to the production departments using the reciprocal services method below.
Cutting Department | Assembly Department | ||
Janitorial Department cost allocation | $38,200 | $152,800 | |
Cafeteria Department cost allocation | $216,000 | $72,000 |
Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.
Cafeteria Department | Cutting Department | Assembly Department | |||
Janitorial Department cost allocation | $155,000 | $31,000 | $124,000 | ||
Cafeteria Department cost allocation | $243,000 | $81,000 |
Compare the total support department costs allocated to each production department under each cost allocation method.
a. Which production department is allocated the most support department costs under the direct method?
Cost ? | ||
$fill in the blank 2 |
b. Which production department is allocated the most support department costs under the sequential method?
Cost ? | ||
$fill in the blank 4 |
c. Which production department is allocated the most support department costs under the reciprocal services method?
Cost ? | ||
$fill in the blank 6 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started