The managers of Crane Manufacturing are discussing ways to allocate the cost of
ID: 2406250 • Letter: T
Question
The managers of Crane Manufacturing are discussing ways to allocate the cost of service departments, such as quality control and maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information:
Quality Control Maintenance Machining Assembly Total
Budgeted overhead $347,000 $198,000 $377,000 $316,000 $1,250,000
costs before
Allocation Budgeted machine – – 51,000 - 51,000
Hours
Budgeted direct – – – 22,000 22,000
labour hours
Budgeted hours – 6,000 18,000 6,000 30,000
of service: Quality
Control
Maintenance 9,000 – 16,200 10,800 36,000
Using the direct method, allocate the Quality Control and Maintenance costs to Machining and Assembly. (Round answers to 0 decimal places, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Support Departments Operating Departments
Quality Control Maintenance Machining Assembly Total
Quality Control ____ ______ ____ _____ ___
Maintenance ____ _____ ___ ____ ___
Direct Support Costs $___ ____ ___ ___ __
Allocations:
Quality Control $____ ____ ___ ____ __
Maintenance $___ ___ ___ ___ ___
TotalAllocatedCost $___ ____ ___ ___ ___
Use of service:Quality Control ____ ______ ____ _____ ___
Maintenance ____ _____ ___ ____ ___
Direct Support Costs $___ ____ ___ ___ __
Allocations:
Quality Control $____ ____ ___ ____ __
Maintenance $___ ___ ___ ___ ___
TotalAllocatedCost $___ ____ ___ ___ ___
Explanation / Answer
Solution:
From Support Department Cost Allocation - Direct Method Support Department Operating Departments Quality Control Maintenance Machining Assembly Direct charges of department $347,000 $198,000 $377,000 $316,000 Allocations: Quality control (6:30) -$347,000 $57,833 $289,167 Maintenance (16200 : 10800) -$198,000 $118,800 $79,200 Total $0 $0 $553,633 $684,367Related Questions
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