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Comparison of Methods of Allocation

Duweynie Pottery, Inc., is 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. No 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$$Power$$General Factory$$Pottery$$RetailOverhead costs$$150,000$$$181,200$$$97,000$$$56,000$Machine hours$2,0002,5007,0003,000$Square footage$2,5001,7004,0006,000$

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.

Allocation RatiosPotteryRetailProportion of machine hoursfill in the blank $1$fill in the blank $2$Proportion of square footagefill in the blank $3$fill in the blank $4$

Cost AllocationsPotteryRetailPower$fill in the blank $5$$fill in the blank $6$General Factoryfill in the blank $7$fill in the blank $8$Direct costsfill in the blank $9$fill in the blank $10$$fill in the blank $11$$fill in the blank $12$

$2.$ Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost.

Note: If an amount is zero, enter $"0".$ Input to two decimal places.

Allocation RatiosPowerGeneral FactoryPotteryRetailMachine hoursfill in the blank $13$fill in the blank $14$fill in the blank $15$fill in the blank $16$Square footagefill in the blank $17$fill in the blank $18$fill in the blank $19$fill in the blank $20$

Cost AllocationsPowerGeneral FactoryPotteryRetailDirect costs$fill in the blank $21$$fill in the blank $22$$fill in the blank $23$$fill in the blank $24$General Factoryfill in the blank $25$fill in the blank $26$fill in the blank $27$fill in the blank $28$fill in the blank $29$fill in the blank $30$Powerfill in the blank $31$fill in the blank $32$fill in the blank $33$fill in the blank $34$Cost after allocation$fill in the blank $35$$fill in the blank $36$$fill in the blank $37$$fill in the blank $38$

$3.$ Allocate the support service costs using the reciprocal method.

Note: If an amount is zero, enter $"0".$ Input to two decimal places.

Allocation RatiosPowerGeneral FactoryPotteryRetailMachine hoursfill in the blank $39$fill in the blank $40$fill in the blank $41$fill in the blank $42$Square footagefill in the blank $43$fill in the blank $44$fill in the blank $45$fill in the blank $46$

Cost AllocationsPotteryRetailGeneral Factory$fill in the blank $47$$fill in the blank $48$Powerfill in the blank $49$fill in the blank $50$Direct costsfill in the blank $51$fill in the blank $52$Cost after allocation$fill in the blank $53$$fill in the blank $54$ Comparison of Methods of Allocation

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.

Cost Allocations Pottery Retail

Power Retain $\backslash (-\backslash )$

General Factory

Direct costs

$\backslash (\backslash$$ $\backslash )$

$\backslash (\backslash$$ $\backslash )2.$ Allocate the support service costs using the sequential method. The support departments are ranked in order of highest cost to lowest cost.

Note: If an amount is zero, enter $"0".$ Input to two decimal places.

$3.$ Allocate the support service costs using the reciprocal method.

Note: If an amount is zero, enter $"0".$ Input to two decimal places.

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