Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Smart Company has two service departments, Administration service (AS) and Information System (IS). AS costs of $400,000 are allocated on the basis of labor hours.
Smart Company has two service departments, Administration service (AS) and Information System (IS). AS costs of $400,000 are allocated on the basis of labor hours. Is costs of $500,000 are allocated based on the number of computers. The costs of operating departments Cutting and Assembly are $800,000 and $450,000, respectively. Data on budgeted labor hours and number of computers are as follows: Support Departments Production Departments Administration Information Assembly service (AS) System (IS) Costs before allocation $400,000 $500,000 $800,000 $450,000 Labor hours 500 10,000 15,000 Number of computers 10 25 15 Cutting Required: Use direct method to allocate the support department costs to production departments? (round the results) Support Departments Production Departments Administration Information service System Cutting Assembly (AS) (IS) ( Costs before allocation $400,000 $500,000 $800,000 $400,000 Allocate AS costs Allocate IS costs Costs after allocation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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