Question
Blossom Company is a manufacturer of womens and mens swimsuits. The company uses a dual-rate system to allocate support costs. Last years support departments fixed
Blossom Company is a manufacturer of womens and mens swimsuits. The company uses a dual-rate system to allocate support costs. Last years support departments fixed and variable costs are as follows:
Human | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Accounting | Resources | Janitorial | Total | |||||||||
Variable costs | $ | 17,100 | $ | 20,200 | $ | 56,200 | $ | 93,500 | ||||
Fixed costs | 57,000 | 93,800 | 54,800 | 205,600 | ||||||||
Total costs | $ | 74,100 | $ | 114,000 | $ | 111,000 | $ | 299,100 |
Allocation base amounts for all the departments are as follows:
Human | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Accounting | Resources | Janitorial | Women's | Men's | Total | |||||||||||||
Employees | 2 | 3 | 5 | 9 | 6 | 25 | ||||||||||||
Time spent for accounting | 16% | 11% | 21% | 31% | 21% | 100% | ||||||||||||
Time spent cleaning | 5% | 9% | 16% | 30% | 40% | 100% | ||||||||||||
Square metres | 80 | 109 | 129 | 460 | 460 | 1,238 | ||||||||||||
Direct costs | $ | 74,100 | $ | 114,000 | $ | 111,000 | $ | 849,000 | $ | 469,000 | $ | 1,617,100 |
Use the following allocation bases for fixed support costs: direct costs for accounting, number of employees for human resources, and square metres for janitorial. Allocate fixed support costs using the direct method.
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