Answered: alculate the cost assignment ratios to…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 34BEB: Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a...

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(Appendix 4B) Assigning Support Department Costs by Using the Direct Method

Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay:

	Support Departments		Producing Departments
	S1	S2		Assembly	Painting
Direct costs	$200,000	$140,000		$115,000	$96,000
Normal activity:
Square footage	—	500		1,875	625
Machine hours	337	—		3,200	12,800

Required:

1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratios—one for Assembly and the other for Painting.) Round your answers to two decimal places.

	Assembly	Painting
S1	fill in the blank 1	fill in the blank 2
S2	fill in the blank 3	fill in the blank 4

2. Allocate the support department costs to the producing departments by using the direct method. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the box blank or enter zero ("0").

	Support Departments	Producing Departments
Allocate:	S1	S2	Assembly	Painting
Direct costs	$fill in the blank 5	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8

S1	fill in the blank 9	fill in the blank 10	fill in the blank 11	fill in the blank 12
S2	fill in the blank 13	fill in the blank 14	fill in the blank 15	fill in the blank 16
Total	$fill in the blank 17	$fill in the blank 18	$fill in the blank 19	$fill in the blank 20

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