Hi Consider the following independent cases that relate to service department cost allocations Case A Aaron Company has two service departments Human Resources (H R) and Information Systems and two production departments (Machining and Assembly) Human Resource cost is allocated by using the direct method based on the number of personnel in each department For the period just ended, there were 189 employees in Machining, and Machining received $90,000 of H R's overhead of $200,000 How many employees are in the Assembly Department Case B Drew Montana, controller of Butte Enterprises, wants service department managers to be aware that their use of other service departments costs the firm a substantial amount of money Would Drew prefer the direct method or the step down method of cost allocation Why Case C Laramie Company has four service departments (S1, S2, S3, and S4) and two production departments (P1 and P2) The costs of S1 are allocated first, followed in order by the costs of S2, S3, and S4 Laramie uses the step down method, and the costs of S2 are allocated based on the number of computer hours used Computer hours logged during the period were as follows S1, 4,600 S2, 7,100 S3, 10,400 S4, 17,600 P1, 37,000 and P2, 48,600 Over how many hours would S2's cost be allocated Case D A recently hired staff accountant noted that given the nature of the allocations, the total cost allocated to production departments is typically less under the step down method than under the direct method Do you agree with the accountant Why Required Answer the questions that are raised in Cases A, B, C, and D ma

Question

Hi  Consider the following independent cases that relate to service department cost allocations  Case A   Aaron Company has two service departments  Human Resources (H R) and Information Systems  and two production departments (Machining and Assembly)  Human Resource cost is allocated by using the direct method based on the number of personnel in each department  For the period just ended, there were 189 employees in Machining, and Machining received $90,000 of H R's overhead of $200,000  How many employees are in the Assembly Department  Case B   Drew Montana, controller of Butte Enterprises, wants service department managers to be aware that their use of other service departments costs the firm a substantial amount of money  Would Drew prefer the direct method or the step down method of cost allocation  Why  Case C   Laramie Company has four service departments (S1, S2, S3, and S4) and two production departments (P1 and P2)  The costs of S1 are allocated first, followed in order by the costs of S2, S3, and S4  Laramie uses the step down method, and the costs of S2 are allocated based on the number of computer hours used  Computer hours logged during the period were as follows  S1, 4,600  S2, 7,100  S3, 10,400  S4, 17,600  P1, 37,000  and P2, 48,600  Over how many hours would S2's cost be allocated  Case D   A recently hired staff accountant noted that given the nature of the allocations, the total cost allocated to production departments is typically less under the step down method than under the direct method  Do you agree with the accountant  Why  Required  Answer the questions that are raised in Cases A, B, C, and D   ma

Accepted Answer

The Answer is in the image, click to view ...

Hi. Consider the following independent cases that relate to service department cost allocations: Case A : Aaron

Question:

International Macroeconomics

Hi. Consider the following independent cases that relate to service department cost allocations: Case A : Aaron

Question:

Expert Answer:

The Answer is in the image, click to view ... View the full answer

International Macroeconomics

Students also viewed these Accounting questions