Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer as soon as possible. G D B MF Ltd. has 2 service departments (Accounting and Maintenance) and 2 operating departments (Lawnmower and Weedwacker).
please answer as soon as possible. G D B MF Ltd. has 2 service departments (Accounting and Maintenance) and 2 operating departments (Lawnmower and Weedwacker). MF's management has decided to allocate Maintenance costs on the basis of the service hours used and Accounting costs on the basis of the number of employees. Below is data concerning MF's current operations: Maintenance Lawnmower Weedwacker $330,000 Accounting $270,000 20 Overhead costs Service hours # Employees $787,500 400 35 $612.500 480 50 10 Required: 1. Allocate the service departments costs using the direct method. (4 marks) 2. Allocate the service departments costs using the step-down method. The department with the higher overhead cost would be allocated first. (6 marks) 3. Allocate the service departments costs using the reciprocal method, assume that the adjusted maintenance cost is $325,400 and the adjusted accounting cost is $246,515. ( 4 marks) (Do not create equations to calculate the amount for the maintenance and accounting costs, use the amounts provided as the adjuste 4. Now write the equations for the service department costs under the reciprocal method. No need to further calculate (2 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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