Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comparison of Methods of Allocation Duweynie Pottery, Inc, is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department

image text in transcribed
image text in transcribed
image text in transcribed
Comparison of Methods of Allocation 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 Support Departments Operating Divisions Power General Factory Pottery Retail Overhead costs $159,600 $181,200 $96,000 $55,000 Machine hours 2,000 2,500 7,000 3,000 Square footage 2,500 1,700 4,000 6,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Requiredi 1. Allocate the support service costs using the direct method Note: Input to two decimal places Pottery Retail Allocation Ratios Proportion of machine hours Proportion of square footage Cost Allocations Pottery Retail Power 1. Allocate the support service costs using the direct method. Note: Input to two decimal places. Pottery Retail Allocation Ratios Proportion of machine hours Proportion of square footage Cost Allocations Pottery Retail Power General Factory Direct costs 2. 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 "O". Input to two decimal places. Power General Factory Pottery Retail Allocation Ratios Machine hours Square footage Cost Allocations Power General Factory Pottery Retail Direct costs Power Retail Pottery General Factory Cost Allocations Direct costs General Factory III Power DID I O Cost after allocation 3. Allocate the support service costs using the reciprocal method. Note: If an amount is zero, enter "O". Input to two decimal places. Allocation Ratios Power General Factory Pottery Retail Machine hours Square footage Cost Allocations Pottery Retail General Factory Power Direct costs 10. Cost after allocation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Crossover Of Audit And Evaluation Practices Comparative Policy Evaluation

Authors: Maria Barrados, Jeremy Lonsdale

1st Edition

1032173874, 978-1032173870

More Books

Students also viewed these Accounting questions

Question

Does it avoid use of underlining?

Answered: 1 week ago