Farmer’s Market United (FMU) is an umbrella organization for all individuals who are go-getters in home-grown produce, homemade jams/jellies, artisan breads, and other hand-crafted items to be sold on local street corners. It represents a proud group of folks who are trying to keep the small producer and the health-conscious consumer top-of-mind when it comes to filling the refrigerator and pantry.As a large organization that provides a variety of services for its regional member clubs, FMU continually strives to better understand its own profitability. FMU has four key support services to assist its members: Member Services, Social Media, Resource Deployment, and Administrative Services. These four support departments exist for the benefit of the three operating segments, which are organized geographically: East, Central, and West. While the support services primarily assist the operating segments, they also cross over and assist each other. The services offered by the support departments, along with the original cost of each support department, are as follows. Compare your cost allocations from the direct and reciprocal methods. Comment on how similar or different they are, and make arecommendation to FMU leadership as to which method it should use for allocating these costs.BI U T₂ T2² L│ E E|J JE I IeTextbook and MediaeTextbook 1eTextbook 2á T9991 |O Word(s)Assistance UsedShould FMU consider using the reciprocal method for allocating some of the support service costs while using the direct methodfor others? Explain. If it did, which support services would you recommend for the reciprocal method? Explain why.BI U T. TIE E|J J|Eá ¶¶97+ | Original costMember Services hoursSocial Media hoursResource Deployment hoursAdmin. Services hoursDirect Method:Original costAllocate Member ServicesAllocate Social MediaAllocate Resource DeploymentAllocate Admin. ServicesTotalReciprocal Method:Original costsAllocate Member ServicesAllocate Social MediaAllocate Resource DeploymentAllocate Admin ServicesTotal supporting costSupport DepartmentsMember Services Social Media Resource Deployment$20,000-100100Member Services$20,000(20,000)$0Member Services$20,000(25,146.20)2,514.622,631.58$0$30,000200300(30,000)Support DepartmentsSocial Media Resource Deployment$30,000$0Support DepartmentsSocial Media$30,000(42,923.98)5,029.24$40,0007,894.74$0200$40,000(40,000)$0Resource Deployment$40,000(45,263.16)5,263.16$0Admin. Services$50,000Admin. Services$50,000(50,000)$0Admin Services$50,000East(50,000)Not available600500400500East$48,468.86EastOperating Segments$-10,776.94Operating Departments$8,5714310,000.0010,000.0010,666.67 13,333.3319,230.76 15,384.62CentralNot available14,307.9930050050010,058.48400CentralOperating UnitsCentral$4,285.71 $7,142.865,388.47WestNot available50050060010,000.0016,000.0015,384.62$43,003.66 $48,527.488,980.7914,307,9915,087.7213,157.89 10,526.3210,526.32$0 $48,30130 $42,795.88 $48,902.82 $140,00014,307.99West12,573.10400WestTotal$140,000

There are different methods for allocation of service department costs over the production…

Farmer’s Market United (FMU) is an umbrella organization for all individuals who are go-getters in home-grown produce, homemade jams/jellies, artisan breads, and other hand-crafted items to be sold on local street corners. It represents a proud group of folks who are trying to keep the small producer and the health-conscious consumer top-of-mind when it comes to filling the refrigerator and pantry. As a large organization that provides a variety of services for its regional member clubs, FMU continually strives to better understand its own profitability. FMU has four key support services to assist its members: Member Services, Social Media, Resource Deployment, and Administrative Services. These four support departments exist for the benefit of the three operating segments, which are organized geographically: East, Central, and West. While the support services primarily assist the operating segments, they also cross over and assist each other. The services offered by the support departments, along with the original cost of each support department, are as follows.

Farmer’s Market United (FMU) is an umbrella organization for all individuals who are go-getters in home-grown produce, homemade jams/jellies, artisan breads, and other hand-crafted items to be sold on local street corners. It represents a proud group of folks who are trying to keep the small producer and the health-conscious consumer top-of-mind when it comes to filling the refrigerator and pantry. As a large organization that provides a variety of services for its regional member clubs, FMU continually strives to better understand its own profitability. FMU has four key support services to assist its members: Member Services, Social Media, Resource Deployment, and Administrative Services. These four support departments exist for the benefit of the three operating segments, which are organized geographically: East, Central, and West. While the support services primarily assist the operating segments, they also cross over and assist each other. The services offered by the support departments, along with the original cost of each support department, are as follows.

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1PB: Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor...

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