Business, 26.02.2020 05:54 helloitschump0vfdz

Support department cost allocation—comparison

Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:

Support Department Cost Driver
Janitorial Department Square footage to be serviced
Cafeteria Department Number of employees
Janitorial
Department Cafeteria
Department Cutting
Department Assembly
Department
Department costs $310,000 $169,000 $1,504,000 $680,000
Square feet 50 5,000 1,000 4,000
Number of employees 10 3 30 10
Allocated the support department costs to the production departments using the direct method below.

Cutting
Department Assembly
Department
Janitorial Department cost allocation $62,000 $248,000
Cafeteria Department cost allocation $126,750 $42,250
Allocated the support department costs to the production departments using the reciprocal services method below.

Cutting
Department Assembly
Department
Janitorial Department cost allocation $38,200 $152,800
Cafeteria Department cost allocation $216,000 $72,000
Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.

Cafeteria
Department Cutting
Department Assembly
Department
Janitorial Department cost allocation $155,000 $31,000 $124,000
Cafeteria Department cost allocation $243,000 $81,000
Compare the total support department costs allocated to each production department under each cost allocation method.

a. Which production department is allocated the most support department costs under the direct method?

Cost
Assembly Department $
b. Which production department is allocated the most support department costs under the sequential method?

Cost
Cutting Department $
c. Which production department is allocated the most support department costs under the reciprocal services method?

Cost
Cutting Department $

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Support department cost allocation—comparison

Becker Tabletops has two support departmen...

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