Question
The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Management has decided that the most appropriate inventory costs
The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows:
Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following:
Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.)
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| Support Departments | Operating Departments | ||||||
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| General | Cafeteria |
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Bldg and |
| Plant | Operating |
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| Grounds | Personnel | Admin. | Loss | Storeroom | Machining | Assembly |
Costs incurred |
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Allocation of costs: | ||||||||
Building and grounds |
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Personnel |
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General plant administration |
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Cafeteria |
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Storeroom |
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Total budgeted costs of operating departments |
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- X i Data Table Support departments: Building and grounds $ Personnel General plant administration Cafeteria: Operating loss 49,000 2,120 22,860 1,290 1,570 $ Storeroom 76,840 Operating departments: Machining $ 34,000 48,000 Assembly 82,000 $ 158,840 Total for support and operating departments Print Done
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