QUESTION 1 Booster Ltd manufactures high-fidelity speakers. The company has two operating departments (Machinery and Assembly)...

 

Transcribed Image Text:

QUESTION 1 Booster Ltd manufactures high-fidelity speakers. The company has two operating departments (Machinery and Assembly) and two support departments (Administrative/Human Resources and Maintenance). The usage of these two support departments' output for 2020 was as follows: Support departments Quality Control Budgeted manufacturing overhead costs before an inter-department cost allocation Support work supplied by: Admin/HR Maintenance 550,000 0% AND 25% Maintenance Admin/HR 475,000 Operating departments 35% 0% 600,000 45% 50% Assembly 1,500,000 20% 25% Required: Answer ALL parts. a) Use the direct method to allocate the budgeted costs of the support departments to the operating departments. (2 Marks) AND b) Use the step-down method to allocate budgeted costs of the support departments to the operating departments. (6 Marks) QUESTION 1 Booster Ltd manufactures high-fidelity speakers. The company has two operating departments (Machinery and Assembly) and two support departments (Administrative/Human Resources and Maintenance). The usage of these two support departments' output for 2020 was as follows: Support departments Quality Control Budgeted manufacturing overhead costs before an inter-department cost allocation Support work supplied by: Admin/HR Maintenance 550,000 0% AND 25% Maintenance Admin/HR 475,000 Operating departments 35% 0% 600,000 45% 50% Assembly 1,500,000 20% 25% Required: Answer ALL parts. a) Use the direct method to allocate the budgeted costs of the support departments to the operating departments. (2 Marks) AND b) Use the step-down method to allocate budgeted costs of the support departments to the operating departments. (6 Marks)