Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department,
Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department Overhead Assigned Pl P2 $ 150,000 250,000 S1 74,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) P1 P2 60 2,000 50,000 3-year average percentage of S1 output used 609 20 6,000 75,000 409 Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. a. Using employee headcount as the allocation base b. Using occupied space as the allocation base c. Using productive capacity as the allocation base d. Using the 3-year average use as the allocation base i P1 P2 Total $ 0 $ $ 0 $ 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started