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you guys need to right click the image and click open in new tab to view it clearer Comparison of Methods of Allocation puweynie Pottery,
you guys need to right click the image and click open in new tab to view it clearer
Comparison of Methods of Allocation puweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs each operating division. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footag- No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the Following data: Use the rounded values for subsequent calculations. Support Departments Operating Divisions Power General Factory Pottery Retail Overhead costs $150,000 $160,000 $98,000 $56,000 Machine hours 2,000 1,000 6,900 3.100 Square footage 2,000 1,700 4,000 6,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar Required: 1. Allocate the support service costs using the direct method. Allocation Ratios Pottery Retail Proportion of machine hours 2.22 X 2.22 X Proportion of square footage 2.22 X 2.22 X . Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost. If an amount is zero, enter "o". Allocation Ratios Power General Factory Pottery Retail Machine hours 0 0 0 0 x Square footage 0.120 X 0 0 X 0.120 X Cost Allocations Power General Factory Pottery Retail Direct costs 150,000 98,000 V 56,000 160,000 160,000 x General Factory 176,667 X 160,000 X 53,333 x 160,000 X 103,500 x Power 176,667 X 103,500 X 176,667 X 103,500 X 273,233 X Cost after allocation 273,233 X . Allocate the support service costs using the reciprocal method. If an amount is zero, enter "0". 3. Allocate the support service costs using the reciprocal method. If an amount is zero, enter "o". Allocation Ratios Power General Factory Pottery Retail Machine hours 0 0 x 0 x 0 X Square footage 0 x 0 0 X 0 x Cost Allocations Pottery Retail General Factory enter "0". Power General Factory Pottery Retail Allocation Ratios Machine hours Square footage 0 0 Pottery Retail Cost Allocations General Factory Power Direct costs Cost after allocation Step by Step Solution
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