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Answer:Direct Method
Under this method, the costs sustained by service departments are not assigned to each other; relatively, they are straight assigned to operating departments using some suitable allocation base. In other words, we can say that the direct method of departmental cost allocation ignores the service delivered by a service department to themself and to other service departments.
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The_ignores support department interactions and assigns support department costs only to the producing departments. direct method...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources...
Sequential (Step) Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $170,000 $330,000 $114,600 $91,000 Normal activity: Number of employees — 50 70 160 Square footage 1,100 — 5,900 13,000 Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of...
Reciprocal Method of Support Department Cost AllocationValron Company has two support departments, Human Resources and...
Reciprocal Method of Support Department Cost AllocationValron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.Support DepartmentsProducing DepartmentsHumanResourcesGeneralFactoryFabricatingAssemblyDirect costs$170,000$330,000$114,200$95,000Normal activity:Number of employees—6080170Square footage1,000—5,70013,300The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage.Now assume that Valron Company uses the reciprocal method to allocate support department costs.Required:1. Calculate the allocation ratios (rounded to four...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $150,000 $330,000 $114,200 $94,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources an...
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees 60 80 120 170 Square footage 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method Quillen Company manufactures a product...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and 52. 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 Quillen: Support Departments Producing Departments si Cutting Sewing Direct costs $180,000 $150,000 $122,000 $90,500 S2 Normal activity: Number of employees 63...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method uillen Company manufactures a product...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method uillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support epartments, Si and S2. The activity driver for Si is number of employees, and the activity driver for S2 is number of naintenance hours. The following data pertain to Quillen: Support Departments Producing Departments s1 s2 Cutting Sewing Direct costs $180,000 $150,000 Normal activity: Number of employees 63 147 Maintenance...
Why is the direct method of support department cost allocation less accurate than the sequential and...
Why is the direct method of support department cost allocation less accurate than the sequential and reciprocal services methods? How does management determine the order in which support department costs are allocated under the sequential method?
Direct Method of Support Department Cost Allocation Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs $160,000 $340,000 $114,600 $93,000 Normal activity: Number of employees 60 80 120 170 Square footage 1,000 5,700 13,300 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and 52. 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 Quillen: Support Departments Producing Departments si Cutting Sewing Direct costs $180,000 $150,000 $122,000 $90,500 S2 Normal activity: Number of employees 63...
Appendix 4B) Assigning Support Department Costs by Using the Direct Method uillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support epartments, Si and S2. The activity driver for Si is number of employees, and the activity driver for S2 is number of naintenance hours. The following data pertain to Quillen: Support Departments Producing Departments s1 s2 Cutting Sewing Direct costs $180,000 $150,000 Normal activity: Number of employees 63 147 Maintenance...
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