Cost allocation
Marshall Welding Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows.
cafeteria 20
human resources 30
machining 100
assembly 150
Marshall Welding uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources cost would be allocated to Cafeteria?
a. $88,888
b. $28,572
c. none of the answers is correct
d. $44,444
e. $0
Homework Answers
OPTION A - $88,888 IS THE HUMAN RESOURCES COST WHICH WOULD BE ALLOCATED OT CAFETERIA
Calculation of Human Resources cost that would be allocated to Cafeteria:
= $ 12,00,000 x (20/270)
= $ 88,888
Working notes :
1.Human resources cost (Given)= $12,00,000
2.Number of employees in Cafeteria = 20
3.Total number of employees from Human resources to departments
= 20 + 100 + 150
= 270 Employees
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tion 39 Seymore company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. ered is out of 10 20 og question Cafeteria Human Resources Machining Assembly 30 100 150 Seymore uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources...
on 37 Pederson Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. out of 10 40 nove flag Cafeteria Human Resources Machining Assembly 60 200 300 Pederson uses the direct method of cost allocation and allocates cost on the basis of employees. If Human Resources cost amounts to $1,800,000, how much of the department's cost would be allocated to Machining? Select one: a. $600,000 ....
Exercise 11-31 Cost Allocation: Reciprocal Method (LO 11-4) Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used b Direct CostsMaintenance Cafeteria Department Machining Assembly Maintenance Cafeteria Machining Assembly $99,000 64,400 40,000 32,000 0.5 0.3 0.1 0.2 0.8 Required Use the reciprocal method to allocate the service costs....
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...
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