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: 2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost. Note: If an amount is zero, enter "0". Input to two decimal places. Allocation Ratios Power General Factory Pottery Retail Machine hours fill in the blank fill in the blank fill in the blank fill in the blank Square footage fill in the blank fill in the blank fill in the blank fill in the blank Cost Allocations Power General Factory Pottery Retail Direct costs $fill in the blank $fill in the blank $fill in the blank $fill in the blank General Factory fill in the blank fill in the blank fill in the blank fill in the blank fill in the blank fill in the blank Power fill in the blank fill in the blank fill in the blank fill in the blank Cost after allocation $fill in the blank $fill in the blank $fill in the blank $fill in the blank

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

Section: Chapter Questions

Problem 3CMA: Young Company is beginning operations and is considering three alternatives to allocate...

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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:

2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost.

Note: If an amount is zero, enter "0". Input to two decimal places.

Allocation Ratios	Power	General Factory	Pottery	Retail
Machine hours	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Square footage	fill in the blank	fill in the blank	fill in the blank	fill in the blank

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

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