Question text
Allocating Service Department
Costs: Allocation Basis Alternatives
Weld-Rite Fabricators has two producing departments, P1 and P2, and
one service department, S1.
Estimated directed overhead costs per month are as
follows:
| P1 | $240,000 |
| P2 | 400,000 |
| S1 | 145,600 |
Other data follow:
| P1 | P2 | |
|---|---|---|
| Numbers of employees | 150 | 50 |
| Production capacity (units) | 100,000 | 60,000 |
| Space occupied (square feet) | 5,000 | 15,000 |
| Five-year average of S1's service output used | 65% | 35% |
For each of the following allocation bases, determine the total estimated overhead cost for P1 and P2 after allocating S1 cost to the producing departments.
| P1 | P2 | |
|---|---|---|
| 1. Based on number of employees | ||
| 2. Production capacity in units | ||
| 3. Space occupied | ||
| 4. Five-year average of S1 service used | ||
| 5. Estimated direct overhead costs |
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Allocating Service Department Costs: Allocation Basis Alternatives Weld-Rite Fabricators has two producing departments, P1 and P2, and one service department, S1 Estimated directed overhead costs per month are as follows: P1 $240,000 P2 400,000 145,600 S1 Other data follow: P1 P2 Numbers of employees 150 50 Production capacity (units) 100,000 60,000 Space occupied (square feet) 5,000 15,000 Five-year average of S1's service output used 65% 35% For each of the following allocation bases, determine...
The Springfield Company has three service departments, S1, S2,
and S3, and two production departments, P1 and P2. The following
data relate to Springfield’s allocation of service department
costs:
Budgeted Costs
Number of Employees
S1
$4,588,000
92
S2
2,834,000
64
S3
2,760,000
41
P1
196
P2
294
Service department costs are allocated by the direct method. The
number of employees is used as the allocation base for all service
department costs.
(a)
Allocate service department costs to production departments.
Service...
The Ceradyne Company has three service departments, S1, S2, and
S3, and two production departments, P1 and P2. The following data
relate to Ceradyne’s allocation of service department
costs:
Budgeted Costs
Number of Employees
S1
$4,101,000
87
S2
3,110,000
58
S3
2,865,000
37
P1
204
P2
306
Service department costs are allocated by the direct method. The
number of employees is used as the allocation base for all service
department costs.
Calculate the total service department cost allocated to each...
The DuffyDog Company has three service departments, S1, S2, and
S3, and two production departments, P1 and P2. The following data
relate to DuffyDog’s allocation of service department costs:
Budgeted Costs
Number of Employees
S1
$4,637,000
89
S2
3,262,000
58
S3
2,618,000
40
P1
196
P2
294
Service department costs are allocated by the direct method. The
number of employees is used as the allocation base for all service
department costs.
(a)
Your answer is correct.
Allocate service department costs...
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and 52. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: S1 S2 P1 P2 0.70 0.10 0.20 0.20 0.30 0.50 Department Direct costs $ 60, 000 S2 $100,000 $160,000 P2 $140,000 S1 P1 Under the step method of allocation, the total amount of service costs...
The Real McCoys Company has two service departments (S1 and S2) and two production departments (P1 and P2). Department S1 allocates service costs based on machine hours. S2 allocates service costs based on kilowatt hours. The company does NOT make a distinction between fixed and variable costs when allocating service costs. The budgeted total costs in the service departments for 2019 are $70,000 for S1 and $98,800 for S2. Budgeted machine hours and kilowatt hours for the year are as...
Question 4 (1 point) A firm has two service departments: HR and IT. The firm incurs $100,000 in the HR department and $150,000 in the IT department. The firm uses step down method with HR costs allocated first. The overhead rate for allocating HR costs is $1,000 per employee. If the IT department has 50 employees, then the total IT costs allocated to the production departments is $250,000 $150,000 $200,000 $100,000
QUESTION 2) Hannover Manufacturing Company has three service departments and three production departments. The company budgeted its manufacturing overhead (MOH) cost for the upcoming year of 2020 as follows: Service Departments Production Departments Factory Repair and Management Cafeteria Maintenance Cutting Molding Finishing 425,000 375,000 95,000 700,000 920,000 485,000 I. Allocation in USD). Space occupied (m²) Number of employees Maintenance hours 500 1,000 200 3,000 4,500 4,000 125 55 22 680 150 720 80 50 0 250 400 300 Machine hours...