Support Departments Producing Departments Human General Resources Factory Fabricating Assembly S160,000 $340,000 $114,600 $93,000 Direct costs Normal activity: Number of employees Square footage 60 80 170 1,000 5,700 13,300
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Valron Company has two support departments, Human Resources and General
Factory, and two producing departments, Fabricating and Assembly.
The costs of the Human Resources Department are allocated on the basis of number
of employees, and the costs of General Factory are allocated on the basis of square
footage. Valron Company uses the direct method of support department cost
allocation.
Required:
1. Calculate the allocation ratios for the four departments using the direct
method.
2. Using the direct method, allocate the costs of the Human Resources and
General Factory departments to the Fabricating and Assembly departments.
3. What if the General Factory Department had 40 employees? How would that
affect the allocation of Human Resources Department costs to the Fabricating
and Assembly departments?
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- Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?Support Department Allocations And Cost Drivers Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services Department (CCS) costs to profit centers. The following table lists the types of services and cost drivers for each service. The table also includes the budgeted cost and quantity for each service for August. CCS Services Cost Drivers Budgeted Cost Budgeted Quantityof Services Help desk Number of calls $72,000 3,600 Network center Number of devices 168,000 2,000 Electronic mail Number of user accounts 166,500 4,500 Smartphone support Number of smartphones issued 131,200 4,100 One of the profit centers for Varney Corporation is the Communication Systems (COMM) division. Assume the following information for COMM: COMM has 3,500 employees, of whom 35% are office employees. All of the office employees have been issued a smartphone, and 96% of them have a computer on the network. Of the employees with a…Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $270,000 to $290,000?
- Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the amount of service department cost allocated to P1 and P2 using the direct method?8. Adidas Inc. is exploring ways to allocate the cost of service departments such as Quality control and Maintenanceto the production departments such as Machining and assembly. The controller of the company has provided thefollowing information:QualityControl Maintenance Machining Assembly Total Budgetedoverhead costsbefore allocation P350,000 P200,000 P400,000 P300,000 P1,250,000 Budgetedmachine hours - - 50,000 hrs - 50,000 hrsBudgeted directlabor hours - - - 25,000 hrs 25,000 hrsBudgeted hoursof service ofquality control - 7,000 hrs 21,000 hrs 7,000 hrs 35,000 hrs Budgeted hoursof servicemaintenance 10,000 hrs - 18,000 hrs 12,000 hrs 40,000 hrs 1. Under direct method of allocating service department costs, what are the total service costs allocated tothe machining and assembly departments, respectively?a. 382,500 and 167,500b. 300,000 and 130,000c. 412,500 and 137,500d. 330,000 and 220,0002. Under the step-down method of allocating service department costs from quality control to…1. The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 46,000 0% 20% 40% 40% Service 2 (S2) 36,000 25 0 30 45 Production 1 (P1) 260,000 Production 2 (P2) 310,000 a. What is the amount of service department cost allocated to P1 and P2 using the direct method? b. What is the total cost in P1 and P2 after allocation using the direct method? c. What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? d. What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $260,000 to $280,000?
- Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…
- Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has…High Traffic Products Corporation has two departments, Small and Large. Central costs could be allocated to the two departments in various ways. Small Department Large Department Square footage 6,700 17,750 Number of employees 1,000 410 Sales $370,000 $1,800,000 If total advertising expense of $629,300 is allocated on the basis of sales, the amount allocated to the Large Department would be ________. A) $107,300 B) $558,000 C) $522,000 D) $314,650Service Department Charges and Activity Bases Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $123,380 3,100 Network center Number of devices monitored 529,200 9,450 Electronic mail Number of user accounts 61,000 6,100 Smartphone support Number of smartphones issued 142,400 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: • The sector has 2,000 employees,…