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Use the following data to prepare a model that allocates the support departments using the three...

Use the following data to prepare a model that allocates the support departments using the three methods (direct, sequential, and reciprocal).

Instructions:

  • You should design your model to include an input section, an output section, and user instructions.
  • The output section should have nothing but references and formulas in it.  
  • For the sequential method, allocate the support department with the highest cost first.
  • For the reciprocal method, either calculate the reciprocal amounts using a formula in Excel or use iterative equations to calculate the amounts.

Support Departments

Producing Departments

Departments

General Factory

Receiving

Assembly

Finishing

Direct Overhead

$350,000

$185,000

$41,000

$74,000

Square Footage

3,200

5,100

4,700

# of Receiving Orders

300

1,680

1,020
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Answer #1
Assembly Finishing
Direct Method $ 338,254 $ 311,746
Step Down Method $ 347,026 $ 302,974
Reciprocal Method $ 344,892 $ 305,108

Direct Method Service Department Operating Department Support Producing Department Department Assembly Finishing Total $ 350,

Reciprocal Method Service Department Operating Department Support Producing Department Department Assembly Finishing Total De

Formula Sheet:

124 B D E F G H 1 2 3 Direct Method 4 Service Department Operating Department 5 Support Department Producing Department 35000

B с D E F G H 20 Reciprocal Method 21 22 Service Department Operating Department 23 Support Department Producing Department 3

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