Question
Company has four departments, of which Assembly and finishing are producing departments. Meanwhile, power and general factory are serice (support) departments. The following information pertains
Company has four departments, of which Assembly and finishing are producing departments. Meanwhile, power and general factory are serice (support) departments. The following information pertains to the service (support) departments:
Service provided to:
Power General Factory Assembly Finishing
Direct costs $90,000 $60,000 $45,000 $75,000
Power -- 20% 30% 50%
General Faculty 40% -- 30% 30%
REQUIRED:
Determine the total amount of costs assigned to the Assembly and Finishing Departments after you allocate the service (support) department costs using the direct method (includes direct costs).
Determine the total amount of costs assigned to the Assebmly and Finishing Departments after you allocate the service (support) department costs using the Step (sequential) method (includes direct costs). Allocate General Factory costs first.
Given the two equations to measure the total amount to costs to be allocated from the two support department using the reciprocal method.
Under the reciprocal method, what is the total costs to be allocated from the Power Department?
Under the reciprocal method, what is the total cost to be allocated from the General Factory Department?
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