Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Reciprocal Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

image text in transcribed
image text in transcribed
image text in transcribed
Reciprocal Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allacated on the basis of square footage. Now assume that Chekov Company uses the reciprocal method to allocate support department costs. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter " 0 ". Use the rounded values for subsequent calculations. 2. Develop a simultaneous equations system of total costs for the support departments. If required, round your answers to four decimal places. Use these numbers for subsequent calculations. If required, round all other Intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) = General Foctory (GF) = = Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) 3. Using the reciprocal method, allocate the costs of the Human Rescurces and General Foctory departments to the Fabricating and Assembly deportments. Round all allocated costs to the nearest dollar. If an amount is zero, enter "0". Note: There may be a " $1 " difference due to Intermediate rounding. Direct costs places. Use these numbers for subsequent calculations. If required, round all other Intermediate calculations to six decimal places, except the answers computed in requirement 1. Human Resources (HR) General Factory (GF) Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) Human Resources (HR) General Factory (GF) 3. Using the reciprocal method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly deportments. Round all allocated costs to the nearest dollar. If an amount is zero, enter "0". Note: There may be a " $1 " difference due to Intermediate rounding

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_2

Step: 3

blur-text-image_step3

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

More Books

Students also viewed these Accounting questions

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago