50.1K

Verified Solution

Link Copied!

Power Comparinon of Methods of Allocation Duweynie Pottery, Inc., in divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. Na effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations Support Departments Operating Divisions General Factory Pottery Retail $181,200 $58,000 2,500 4,000 6,000 Round all allocation ratios to four significant digits, Round all allocated amounts to the nearest dollar. Required: 1. Allocate the support service costs using the direct method Note: Input to two decimal places Overhead costs $140.400 596,000 Machine hours 2,000 7,000 3,000 Square footage 2,500 1,700 Pottery Retail Allocation Ratios Proportion of machine hours Proportion of square footage 0.700 0.300 0.3200 0.4800 Cost Allocations Pottery Retail Power General Factory Direct costs 2. Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cout. Notes It an amount is zero, enter "O". Input to two decimal places. Allocation Ratios Power General Factory Pottery Retail Machine hours Square footage Cost Allocations Power Pottery Retail General Factory 160,000 Direct costs 150,000 96,000 58.000 General Factory Power Costa allocation 3. Allocate the support service costs using the reciprocal method. Note: If an amount is zero, enter "O". Input to two decimal places. Power General Factory Pottery Retail Allocation Ratios Machine hours Square footage Pottery Retail Cost Allocations General Factory Power Direct costs Cost after allocation

Answer & Explanation Solved by verified expert

See Answer