Q1. Allocate the support department cost to operating department using Direct Me
ID: 2464034 • Letter: Q
Question
Q1. Allocate the support department cost to operating department using Direct Method. The information for the recent period is as follows:
Support Department
Operating Department
Medical
Possible Allocation Bases:
Support Department
Operating Department
Medical
No. of Employees
Square Feet
Administration Cost will be allocated using number of employees and Housekeeping cost will be allocated using square feet.
Support Department
Operating Department
Administration HousekeepingMedical
Total Cost 32400 48600 127,000 106,000 314,000Explanation / Answer
Solution :
Department
Medical
Dental
Administration
Housekeeping
cost
127,000
106,000
32,400
48,600
Administration cost allocation
20,250
12,150
- 32,400
no of employees Ratio = 5:3
(32400*5/8)
(32400*3/8)
Housekeeping cost allocation
43,200
5,400
- 48,600
Square feet Ratio = 8000:1000
(48600*8000/9000)
(48600*1000/9000)
Department
Medical
Dental
Administration
Housekeeping
cost
127,000
106,000
32,400
48,600
Administration cost allocation
20,250
12,150
- 32,400
no of employees Ratio = 5:3
(32400*5/8)
(32400*3/8)
Housekeeping cost allocation
43,200
5,400
- 48,600
Square feet Ratio = 8000:1000
(48600*8000/9000)
(48600*1000/9000)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.