Lanoka Company manufactures pottery in two producing departments: Shaping and Firing. Three support departments support the following
Question:
Lanoka Company manufactures pottery in two producing departments: Shaping and Firing. Three support departments support the following production departments:
Power, General Factory, and Human Resources. Budgeted data on the five departments are as follows:
Power is allocated on the basis of kilowatt-hours, general factory is allocated on the basis of square footage, and human resources is allocated on the basis of direct labor hours. The company does not break overhead into fixed and variable components.
Required:
1. Calculate the cost assignment ratios to be used under the sequential method for power and general factory.
2. Allocate the overhead costs to the producing departments by using the sequentialmethod.
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger