Charlie’s Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments...
Charlie’s Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitorial and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 45,920 square feet and holds assets valued at about $68,680. The Cutting Department spans about 36,080 square feet and holds assets valued at about $133,320. Charlie’s Wood Works allocates support department costs using the direct method. If costs from the Janitorial Department are allocated based on square feet and costs from the Security Department are allocated based on asset value.
a. Determine the percentage of Janitorial costs
that should be allocated to the Assembly Department.
%
b. Determine the percentage of Security costs
that should be allocated to the Cutting Department.
%
Homework Answers
| Answer | ||
| a. 56% | ||
| b. 66% | ||
| Allocation Ratios | Assembly | Cutting |
| Janitoral Cost:-Proportion of Square Footage | 56% | 44% |
| (45920/82000) | (36080/82000) | |
| Security Cost:-Proportion of Asset Value | 34% | 66% |
| (68680/202000) | (133320/202000) | |
| Please like ( Positive Rating ) | ||
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