Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to 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 footage. 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 RetailOverhead costs$150,000 $171,600 $97,000 $55,000Machine hours2,000 2,500 7,000 3,000Square footage2,500 1,700 4,000 6,000Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar.Required:1. Allocate the support service costs using the direct method.Note: Input to two decimal places. Allocation RatiosPotteryRetailProportion of machine hoursfill in the blank 1fill in the blank 2Proportion of square footagefill in the blank 3fill in the blank 4 Cost AllocationsPotteryRetailPower$fill in the blank $fill in the blank General Factoryfill in the blank fill in the blank Direct costsfill in the blank fill in the blank

Power Department’s cost has been allocated on the basis of number of machine hours: 7,000 hours +…

Answered: Duweynie Pottery, Inc., is divided into…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

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Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to 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 footage. 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	$171,600	$97,000	$55,000
Machine hours	2,000	2,500	7,000	3,000
Square footage	2,500	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.

Note: Input to two decimal places.

Allocation Ratios	Pottery	Retail
Proportion of machine hours	fill in the blank 1	fill in the blank 2
Proportion of square footage	fill in the blank 3	fill in the blank 4

Cost Allocations	Pottery	Retail
Power	$fill in the blank	$fill in the blank
General Factory	fill in the blank	fill in the blank
Direct costs	fill in the blank	fill in the blank

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