Answered

Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

Using the sequential method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has determined to allocate Janitorial costs before Cafeteria costs. It has the following information about its two service departments and two production departments, Cutting and Assembly:

Costs Square Feet Number of Employees
Janitorial Department $450,000   100       20       
Cafeteria Department 200,000   10,000       10       
Cutting Department 1,500,000   2,000       60       
Assembly Department 3,000,000   8,000       20      

The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is: _________

a. 75%
b. 18.2%
c. 22.2%
d. 25%

Sagot :

anthougo

Answer:

Pone Hill Company

The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is: _________

 

d. 25%

Explanation:

a) Data and Calculations:

                                           Costs    Square Feet   Number of Employees

Janitorial Department    $450,000        100                        20

Cafeteria Department      200,000   10,000                        10

Cutting Department       1,500,000    2,000                       60

Assembly Department  3,000,000    8,000                       20

Janitorial departments costs = square footage service

Cafeteria department costs = number of employees

Cost Allocation:

                       Janitorial    Cafeteria      Cutting       Assembly           Total

Direct costs  $450,000   $200,000  $1,500,000  $3,000,000 $5,150,000

Janitorial       (450,000)     225,000         45,000        180,000    0

Cafeteria                           (425,000)       318,750         106,250   0

Total allocated costs                          $1,863,750   $3,286,250 $5,150,000

Allocation of costs:

Janitorial:

Cafeteria = $225,000 ($450,000 * 10,000/20,000)

Cutting = $45,000 ($450,000 * 2,000/20,000)

Assembly = $180,000 ($450,000 * 8,000/20,000)

Cafeteria:

Cutting = $318,750 ($425,000 * 60/80)

Assembly = $106,250 ($425,000 * 20/80)

Percentage usage of the Cafeteria Department by the Assembly = 25% ($106,250/$318,750 * 100)

Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.