Support Department Cost Allocation—Sequential Method Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table: Support Department 1 SupportDepartment 2 ProductionDepartment 1 ProductionDepartment 2 Number of employees 9 7 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000 Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments. SupportDepartment 2 ProductionDepartment 1 ProductionDepartment 2 Support Department 1 cost allocation $ $ $
Support Department Cost Allocation—Sequential Method Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table: Support Department 1 SupportDepartment 2 ProductionDepartment 1 ProductionDepartment 2 Number of employees 9 7 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000 Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments. SupportDepartment 2 ProductionDepartment 1 ProductionDepartment 2 Support Department 1 cost allocation $ $ $
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 2E
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Support Department Cost Allocation—Sequential Method
Snowy River Stallion Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table:
Support Department 1 |
Support Department 2 |
Production Department 1 |
Production Department 2 |
||||
Number of employees | 9 | 7 | 25 | 18 | |||
Asset value | $1,150 | $670 | $6,230 | $5,100 | |||
Department cost | $20,000 | $15,500 | $99,000 | $79,000 |
Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments.
Support Department 2 |
Production Department 1 |
Production Department 2 |
|||
Support Department 1 cost allocation | $ | $ | $ |
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