Molten Works Ltd provides the following information about departmental consumption of allocation bases for its 3 support
Question:
Molten Works Ltd provides the following information about departmental consumption of allocation bases for its 3 support and 2 operating departments. The personnel department has total overhead costs of $74,000; the Cafeteria department has total overhead costs of $180,000 and the Maintenance department has total overhead costs of $103,000
Support departments | Operating departments | ||||
Personnel | Cafeteria | Maintenance | Machining | Assembly | |
Personnel | 26% | 34% | 19% | 21% | |
Cafeteria | 22% | 33% | 17% | 28% | |
Maintenance | 25% | 21% | 26% | 28% |
Required:
Applying the step-down method, compute the total overheads from support departments allocated to Assembly department if the allocation order is personnel, cafeteria and maintenance. Workings on cost allocation steps should be provided for partial marks
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac