CH8-Q4-4B1)

REQUIRED:

Assign the support department costs to Departments Echo and Golf using the step-down method, with the physical plant costs allocated first. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round percentages to 3 decimal places, e.g. 15.251% and other answers to 0 decimal places, e.g. 125.)

Ivanhoe uses the direct method for allocating both fixed and variable costs from the physical plant and equipment maintenance support departments to operating departments Echo and Golf. The bases for allocation are as follows: Physical plant: Fixed costs on the basis of square metres occupied Variable costs on the basis of number of employees Equipment maintenance: Fixed costs on the basis of budgeted machine hours Variable costs on the basis of expected maintenance hours Costs for physical plant and equipment maintenance follow: Physical Equipment Plant Maintenance $ 35,500 $ 80,200 Fixed costs Variable costs $ 18,300 $ 63,900 Allocation bases for all four departments are Support Operating Departments Departments Physical Equipment Dept. Dept. Plant Maintenance Echo Golf Square metres 1,400 3,900 4,900 8,300 10 12 40 50 Number of employees Budgeted machine hours Budgeted maintenance hours 0 100 11,000 14,700 10 20 200 400 Support Departments Physical Equipment Plant Maintenance Fixed Cost Allocation: Allocation bases: Square metres % % Machine hours % % Fixed costs: Step 1: Physical plant Step 2: Equipment maintenance Allocated fixed cost Variable Cost Allocation: Allocation bases: Number of employees % Maintenance hours % Variable costs: Step 1: Physical plant Step 2: Equipment maintenance Allocated variable cost Total allocated cost $