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...


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

Retail
Overhead costs$159,600$181,200$97,000$55,000
Machine hours2,0002,5007,0003,000
Square footage2,5001,7004,0006,000

Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar.



Required:



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



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






























Allocation Ratios

Power

General Factory

Pottery

Retail
Machine hours
Square footage

































Cost Allocations

Pottery

Retail
General Factory
Power
Direct costs
Cost after allocation


Jun 01, 2022
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