Valron Company has two support departments Human Resources and General
Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.
The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Valron Company uses the direct method of support department cost allocation.
Required:
1. Calculate the allocation ratios for the four departments using the direct method.
2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments.
3. What if the General Factory Department had 40 employees? How would that affect the allocation of Human Resources Department costs to the Fabricating and Assembly departments?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help