The company MIKRA SHIPYARDS manufactures small sailing ships following orders from its customers. The production process is
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Question:
The company "MIKRA SHIPYARDS" manufactures small sailing ships following orders from its customers. The production process is organized into two main and two auxiliary departments. The main departments are the Cutting department and the Assembly department and the auxiliary departments are the Repairs department and the Warehouse department. The Repairs department provides services to both the Warehouse department and the other two main departments.
The monthly budget operating cost of the Repair Department is
and the Warehouse department
Additional monthly budget data concerning costs and other operational characteristics regarding the production process of the enterprise are given in the table below.
Auxiliary Departments Production Departments
Repairs Warehouse Cutting Assembly
Other UBIs
Direct Working Hours
Repair Requests
Material Request
The enterprise uses partial UBI attribution factors based on hours of direct work.
Requested:
Reallocate the costs of ancillaries to the main segments using the tiered method by selecting the most appropriate allocation basis for each cost element.
Calculate the partial UBI allocation factors for the two production segments.
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
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