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Support department cost allocation-direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for
Support department cost allocation-direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Cost Driver Square footage to be serviced Support Department Janitorial Department Cafeteria Department Number of employees Janitorial Department Department costs $310,000 Square feet Number of employees 42 10 Cafeteria Department $170,000 5,100 3 Cutting Department $1,510,000 1,800 Assembly Department $660,000 45 Allocate the support department costs to the production departments using the direct method. 4,200 5 Cutting Department Assembly Department Janitorial Department cost allocation $ $ Cafeteria Department cost allocation Support department cost allocation-sequential method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Cost Driver Square footage to be serviced Support Department Janitorial Department Cafeteria Department Number of employees Janitorial Department Cafeteria Department Department costs $310,000 $169,000 Cutting Department $1,504,000 Assembly Department $680,000 Square feet Number of employees 50 10 5,000 3 1,000 4,000 30 10 Allocate the support department costs to the production departments using the sequential method. Allocate the support department with the highest department cost first. Cutting Department Janitorial Department $ Cafeteria Department Assembly Department Joint Cost Allocation-Net Realizable Value Method Nature's Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,400 cubic yards of wood chips, 10,400 cubic yards of mulch, and 9,200 cubic yards of wood pulp. The joint production process costs a total of $34,000 per batch. After the split-off point, wood chips are immediately sold for $25 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $22 and $25 per cubic yard, respectively. The additional production process of the wood pulp costs $5 per cubic yard, after which it is sold for $30 per cubic yard. The additional production process of the mulch costs $4 per cubic yard, after which it is sold for $27 per cubic yard. Allocate the joint costs of production to each product using the net realizable value method. Joint Product Allocation Wood chips 17,665 X Wood pulp 9,006 X Mulch 7,329 X Totals 34,000 Support department cost allocation-reciprocal services method Jolly Roger Rafa, Inc., produces tennis racquets. The tennis racquets are produced in the Cutting and Assembly departments. The production of the tennis racquets is supported by the Janitorial and Cafeteria departments. Janitorial Department costs are allocated to the production departments based on square feet. The Cafeteria Department costs are allocated based on number of employees. Department information is summarized in the following table: Janitorial Cafeteria Cutting Department Department Department Assembly Department Square feet 200 500 1,000 1,000 Number of employees 10 5 30 60 Department cost $3,030 $4,000 $25,000 $19,000 Using the reciprocal services method, find the total cost to be allocated from the Cafeteria Department to the other three departments after all support department cost allocations are made, and the total cost to be allocated from the Janitorial Department to the other three departments after all support department cost allocations are made. Department Total Cost Cafeteria Department $ Janitorial Department
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