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Comparison of Methods of Allocation Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to
Comparison of Methods of Allocation Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest
cost
Note: If an amount is zero, enter Input to two decimal places.
Allocate the support service costs using the reciprocal method.
Note: If an amount is zero, enter Input to two decimal places.
Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory
department costs to each operating division. Power costs are allocated on the basis of the number of machine hours and general factory
costs on the basis of square footage. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated.
Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations.
Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar.
Required:
Allocate the support service costs using the direct method.
Note: Input to two decimal places.
Allocation Ratios
Pottery
Retail
Proportion of machine hours
Proportion of square footage
Cost Allocations
Pottery
Retail
Power
General Factory
Direct costs
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