Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments Assembly Finishing $74,000 Direct overhead $41,000 Square footage 5,600 5,600 Number of receiving orders 1,700 1,500 Direct labor hours. 28,000 The company has decided Osimplify its method of allocating support service costs by switching to the direct method. General Factory Receiving $480,000 $190,000 360 2,800 Assembly Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar. Use the rounded values subsequent calculations. Allocation ratios: 42,000 Finishing
Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments Assembly Finishing $74,000 Direct overhead $41,000 Square footage 5,600 5,600 Number of receiving orders 1,700 1,500 Direct labor hours. 28,000 The company has decided Osimplify its method of allocating support service costs by switching to the direct method. General Factory Receiving $480,000 $190,000 360 2,800 Assembly Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar. Use the rounded values subsequent calculations. Allocation ratios: 42,000 Finishing
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 23E: Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating...
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