Vanderber Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Vanderber Company:

Required:
1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Each support department will have two ratios'one for Cutting and the other for Sewing.)
2. Allocate the support department costs to the producing departments by using the directmethod.

Transcribed Image Text:

Producing Departments Cutting Support Departments S2 Sewing $180,000 $150,000 $122,000 90,500 147 4,000 S1 Direct costs Normal activity: Number of employees Maintenance hours 30 63 16,000 1,200