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Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee
Required:
1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department:
a. Using employee headcount as the allocation base.
b. Using occupied space as the allocation base.
c. Using productive capacity as the allocation base.
d. Using the 3-year average use as the allocation base.
Required Information [The following information applies to the questions displayed below.] Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data It collected appear in the table below. Overhead Assigned $153,000 254, 580 76,080 Department Pi P2 si Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of si output used P1 64 3,500 31,750 60% P2 16 6,500 95,250 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base. b. Using occupled space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. P1 P2 Total a. $ S Using employee headcount as the allocation base b. Using occupied space as the allocation base Using productive capacity as the allocation base d. Using the 3-year average use as the allocation base Oo oo c. $ $Step by Step Solution
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