In addition to the 3D Printers, Jeff’s also manufactures cameras and has two sup
ID: 342386 • Letter: I
Question
In addition to the 3D Printers, Jeff’s also manufactures cameras and has two support departments: sales and administration. The table below presents a breakdown of how the service departments’ work is distributed to the manufacturing departments. Sales departments OH is allocated by sales visits made and administration by the number of employees in each department.
Sales
Administration
Total Costs
$400,000
$500,000
Driver:
Sales
N/A
5
Administration
0
N/A
3D Printers
1,500
400
Cameras
500
95
Total Drivers
2,000
500
1. Assuming that Jeff’s uses the Sequential method and allocates the Administration costs first, how much of the service OH should be allocated to the 3D Printer line? Use the sequential method here. Remember that a percentage of the Administration budgeted costs will go into sales.
Sales
Administration
Total Costs
$400,000
$500,000
Driver:
Sales
N/A
5
Administration
0
N/A
3D Printers
1,500
400
Cameras
500
95
Total Drivers
2,000
500
Explanation / Answer
Service OH allocated to 3D Priter line = $703,750
Service OH allocated to Cameras line = $196,250
Working:
Administration Sales 3D Printers Cameras Beginning costs 500000 400000 Administration -500000 5000 400000 95000 Total 0 405000 400000 95000 Sales -405000 303750 101250 Total 0 703750 196250Related Questions
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