Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1: Support Department cost allocation Computer Horizons Ltd. manufactures computers. The company has two corporate support departments (legal and personnel) in supporting each other

image text in transcribed
Question 1: Support Department cost allocation Computer Horizons Ltd. manufactures computers. The company has two corporate support departments (legal and personnel) in supporting each other and two manufacturing departments, the Laptop department and the Workstation department. The overhead costs of support departments are allocated to the manufacturing departments. Legal hours are used to allocate the cost of legal department, and personnel hours are used to allocate the cost of personnel department. The budgeted overhead costs and cost allocation bases are given below: Support Departments Manufacturing Departments Legal Personnel Laptop Workstation Overhead Costs before any inter department cost allocations $9,055 $4,000 $240,000 $200,000 Support Work provided by Legal Department Legal hours 2 3 37 20 Support work provided by Personnel Department Personnel hours 40 30 200 160 Required: Report the total costs of the manufacturing departments (Laptop and Workstation) after the support departments' (Legal and Personnel) costs have been allocated using each of the following methods: i. Direct Method ii. Step Down Method (allocate Legal department's cost first) iii. Reciprocal MethodQuestion 1: Support Department cost allocation Computer Horizons Ltd. manufactures computers. The company has two corporate support departments (legal and personnel) in supporting each other and two manufacturing departments, the Laptop department and the Workstation department. The overhead costs of support departments are allocated to the manufacturing departments. Legal hours are used to allocate the cost of legal department, and personnel hours are used to allocate the cost of personnel department. The budgeted overhead costs and cost allocation bases are given below: Support Departments Manufacturing Departments Legal Personnel Laptop Workstation Overhead Costs before any inter department cost allocations $9,055 $4,000 $240,000 $200,000 Support Work provided by Legal Department Legal hours 2 3 37 20 Support work provided by Personnel Department Personnel hours 40 30 200 160 Required: Report the total costs of the manufacturing departments (Laptop and Workstation) after the support departments' (Legal and Personnel) costs have been allocated using each of the following methods: i. Direct Method ii. Step Down Method (allocate Legal department's cost first) iii. Reciprocal Method

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

Accounting Multicolumn Journal

Authors: Claudia Gilbertson

10th Edition

128552845X, 9781285528458

More Books

Students also viewed these Accounting questions

Question

What activities are included in environmental costing?

Answered: 1 week ago

Question

What is a multivariate data set?

Answered: 1 week ago

Question

Purpose: What do we seek to achieve with our behaviour?

Answered: 1 week ago

Question

An action plan is prepared.

Answered: 1 week ago