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Please do part 2 as well. 2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest
Please do part 2 as well.
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 "0". Input to two decimal places.
Duweynie Pottery, Incr 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 General Factory Pottery $97,000 7,000 4,000 Power Retail $159,600 2,000 2,500 Overhead costs Machine hours Square footage Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Required 1. Allocate the support service costs using the direct method. Note: Input to two decimal places. $171,600 2,500 1,700 $56,000 3,000 6,000 Allocation Ratios Proportion of machine hours Proportion of square footage Pottery 0.7 0.4 Retail 0.3 0.6 Cost Allocations Pottery Retail Power General Factory Direct costs however, only budgeted cost"re located. Aloations for the coming veor are based on the folowing dons use the rounded values forsubsequent crutos. Operating Divisions General Factory Pottery 155400 171.00 7,000 2 500 7,000 3,000 Square foocage 6.000 Round all alocanion ratiss to faur significant digits, Round all allocated smouncs co the nearest dollar Note: Input to two dacinal alac. Prapartion of machine hour Propordion of square fostage 0.6 Cenral Factory Pottery Direct coStep by Step Solution
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