Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Question

Question

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Direct Method of Support Department Cost Allocation

Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

	Support Departments		Producing Departments
	Human Resources	General Factory	Fabricating	Assembly
Direct costs	$160,000	$340,000	$114,600	$93,000
Normal activity:
Number of employees	—	60	80	170
Square footage	1,000	—	5,700	13,300

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. If an amount is zero, enter "0". Round your answer to the nearest cent.

	Proportion of Driver Used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources
General Factory

2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter "0".

	Support Departments		Producing Departments
	Human Resources	General Factory	Fabricating	Assembly
Direct costs	$	$	$	$
Allocate:
Human Resources
General Factory
Total after allocation	$	$	$	$

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

1.

	Proportion of driver used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources	0	0	0.32 (80/250)	0.68 (170/250)
General Factory	0	0	0.3 (5700/19000)	0.7 (13300/19000)

2.

	Support Department		Producing Department
	Human Resources	General Factory	Fabricating	Assembly
Direct costs	$160,000	$340,000	$114,600	$93,000
Allocate:
Human Resources	(160,000)		51,200	108,800
General Factory		(340,000)	102,000	238,000
Total after allocation	$0	$0	$267,800	$439,800

Add a comment

Answer 2

Similar Homework Help Questions

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources an...

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees 60 80 120 170 Square footage 1,000 5,700 13,300 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...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources...

Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are...

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $150,000 $330,000 $114,200 $94,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources...

Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $170,000 $330,000 $114,600 $91,000 Normal activity: Number of employees — 50 70 160 Square footage 1,100 — 5,900 13,000 Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of...
Reciprocal Method of Support Department Cost AllocationValron Company has two support departments, Human Resources and...

Reciprocal Method of Support Department Cost AllocationValron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.Support DepartmentsProducing DepartmentsHumanResourcesGeneralFactoryFabricatingAssemblyDirect costs$170,000$330,000$114,200$95,000Normal activity:Number of employees—6080170Square footage1,000—5,70013,300The 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.Now assume that Valron Company uses the reciprocal method to allocate support department costs.Required:1. Calculate the allocation ratios (rounded to four...

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and...

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and...

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct easts $160,000 $340,000 $114,600 593,000 Normal activity: Number of employees 60 30 170 13,300 Square footage 1,000 5,700 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...
Support department cost allocation direct method Becker Tabletops has two support departments (anitorial and Cafeteria) and...

Support department cost allocation direct method Becker Tabletops has two support departments (anitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Cost Driver Janitorial Department Square footage to be serviced Cafeteria Department Number of employees Janitorial Cafeteria Cutting Assembly Department Department Department Department Department costs $310,000 $169,000 $1,504,000 $680,000 Sare feet 5.000 1,000 4,000 Number of employees 10 3 30 10 Allocate the support department costs to the production...

Support department cost allocation—direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two...

Support department cost allocation—direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Cost Driver Janitorial Department Square footage to be serviced Cafeteria Department Number of employees Janitorial Department Cafeteria Department Cutting Department Assembly Department Department costs $280,000 $170,000 $1,480,000 $670,000 Square feet 48 5,200 1,200 1,800 Number of employees 12 2 14 6 Allocate the support department...

Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Homework Answers

Add Answer to:
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...

Post as a guest

Earn Coins