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Problem 6. Highl_ support departme- ollows:

Problem 6. Highl_ support departme- ollows:

Managerial Accounting
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
Section: Chapter Questions
Problem 2BE: Multiple production department factory overhead rates The total factory overhead for Bardot Marine...
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Problem 6. Highland Producers prices its products at full cost plus 30 percent. The company operates two support departments and two producing departments. Budgeted costs and normal activity levels are as follows: Support Departments Producing Departments А B C $240,000 6,000 40 6,400 10,800 Support Department A's costs are allocated based on square feet, and Support Department B's costs are allocated based on number of employees. Department C uses direct labor hours to assign overhead costs Overhead costs $40,000 1,000 $100,000 1,200 $180,000 2,000 Square feet Number of employees 20 30 60 10,000 6,000 Direct labor hours Machine hours to products, while Department D uses machine hours. Required: Determine the amount of costs for each producing department using the direct method of allocation а. b. Determine the amount of costs for each producing department using the sequential method of allocation Department B should be allocated first. Determine the amount of costs for each producing department using the reciprocal method of allocation с.
Transcribed Image Text:Problem 6. Highland Producers prices its products at full cost plus 30 percent. The company operates two support departments and two producing departments. Budgeted costs and normal activity levels are as follows: Support Departments Producing Departments А B C $240,000 6,000 40 6,400 10,800 Support Department A's costs are allocated based on square feet, and Support Department B's costs are allocated based on number of employees. Department C uses direct labor hours to assign overhead costs Overhead costs $40,000 1,000 $100,000 1,200 $180,000 2,000 Square feet Number of employees 20 30 60 10,000 6,000 Direct labor hours Machine hours to products, while Department D uses machine hours. Required: Determine the amount of costs for each producing department using the direct method of allocation а. b. Determine the amount of costs for each producing department using the sequential method of allocation Department B should be allocated first. Determine the amount of costs for each producing department using the reciprocal method of allocation с.
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