Question

data of Alpha Company. If calculated through the direct method, the support department costs assigned to the grinding department are Grinding Assembly $250,000 $100,000 Power $300,000 Direct overhead costs Expected activity 400,000 100,000 Oa. $100,000 Ob. $200,000 Oc. $150,000 Od.$240,000 e. $350,000 Next

Answer 1

1.using direct method.

Cost assigned to grilling department: Total overhead cost of power to be distributed in kilowatt hour ratio

= {300,000*(400,000/500,000)}=$240,000

Option D

2.Using sequential method.

Cost assinged to assembly department: Total overhead cost to be distributed in kilowatt hour ratio to all departments including service department and later service department overheads to be distributed to manufacturing departments using direct overhead ratio.

= {300,000*(100,000/500,00)}

=$ 60,000

Option E