eBook Sequential (Step) Method of Support Department Cost Allocation Vairon Comp

Question

eBook Sequential (Step) Method of Support Department Cost Allocation Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Human General Fabricating Assembly Resources Factory Direct costs 170,000$320,000 114,100 $96,000 Normal activity: Number of employees Square footage Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the bass of square footage. Now assume that Valron Company uses the sequential m s0 170 1,500 5,600 13,700 support departments are ranked in order of highest cost to lowest cot Required: 1- Calculste the allocation ratios (rounded to four signficant dioits) fer the four departments using the senquentisal methot Ir an amount is aere, enter 'o: use the rounded valives for subequent caloulations Proportion of Driver Used by General Factory Assembly Human Resources 0.27 General Factory 0.05x Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. Df an amount is nero, enter"o". Round your answers to B Support Departments Human Resources General Factory Fabricating 114,100 Allocate: General Factory al after allocation

Explanation / Answer

1) human resource Fabricating = 70/(70+170) 0.2917 Assembly =170/(70+170) 0.7083 General Factory human resource = 1500/(1500+5600+13700) 0.0721 fabricating = 5600/(1500+5600+13700) 0.2692 Assembly= 13700/(1500+5600+13700) 0.6587 human General Fabricating Assembly resource Factory Human Resource 0 0 0.2917 0.7083 General Factory 0.0721 0 0.2692 0.6587 2) human Genreal Fabricating Assembly Resource Factory Direct costs 170000 320000 114100 96000 Allocate: General Factory 23077 -320000 86154 210769 human resources -193077 0 56321 136756 total after allocation 0 0 256574 443526

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