The following set up is a system of simultaneous linear equations to allocate costs using the...
The following set up is a system of simultaneous linear
equations to allocate costs using the reciprocal method. Matrix
algebra is not required.
The following costs were incurred in three operating departments
and three service departments in Westmoreland Company.
| Department | Direct Costs | Label | ||
| Subassemblies | $ | 550,000 | P1 | |
| Final assembly | 775,000 | P2 | ||
| Marketing | 285,000 | P3 | ||
| Building occupancy | 85,000 | S1 | ||
| Research & development | 120,000 | S2 | ||
| Supervision | 45,000 | S3 | ||
Use of services by other departments is as follows.
| User Department | ||||||
| Service Cost Center | Sub-assemblies | Final Assembly | Marketing | Building Occupancy | R&D | Supervision |
| Bldg. occupancy | .30 | .25 | .20 | --- | .15 | .10 |
| R&D | .50 | .50 | --- | --- | --- | --- |
| Supervision | .20 | .30 | .20 | .10 | .20 | --- |
The equation for department S3 (supervision) is:
S3 = $45,000 + .90S1 + .10S2.
S3 = .10S1.
S3 = $45,000 + .10S1.
S3 = $45,000 + 1.00S1.
Homework Answers
Answer
S3 = $45,000 + .10S1
Explanation:
While calculating costs for supervision departments, it has direct cost of $ 45,000.
Further, 10% of the building occupancy department (S1) is allocated to S3.
So, The equation for department S3 (supervision) is S3 = $45,000 + 0.10S1
In case of any doubt, please comment.
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The following set up is a system of simultaneous linear
equations to allocate costs using the...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method....
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Direct Costs Label Subassemblies $ 560,000 P1 Final assembly 785,000 P2 Marketing 295,000 P3 Building occupancy 95,000 S1 Research & development 130,000 S2 Supervision 55,000 S3 Use of services by other departments is as follows. User Departments Service Cost Center...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method....
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Direct Costs Label Subassemblies $ 561,000 P1 Final assembly 786,000 P2 Marketing 296,000 P3 Building occupancy 96,000 S1 Research & development 131,000 S2 Supervision 56,000 S3 Use of services by other departments is as follows. User Departments Service Cost Center Sub-assemblies...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method....
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Label P2 Department Subassemblies Final assembly Marketing Building occupancy Research & development Supervision Direct Costs $552,000 777,000 287,000 87,000 122,000 47,000 Use of services by other departments is as follows. Sub- Service Cost Center assemblies Building occupancy 0.30 R&D 0.50 Supervision 0.20 Final...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method....
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Subassemblies Final assembly Marketing Building occupancy Research & development Direct Costs Label $554, 000 P1 779, 000 289, 000 89, 000 P2 P3 s1 124, 000 49, 000 S2 Supervision S3 Use of services by other departments is as follows. User Departments...
Requirement 2. Using the direct method, rework requirement 1 Using the direct method, allocate support-department costs....
Requirement 2. Using the direct method, rework requirement 1 Using the direct method, allocate support-department costs. (Round cost allocations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Operating Departments Support Departments General Cafeteria Plant Operating Bldg and Storeroom Machining Grounds Personnel Admin. Loss Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Enter any number in the edit fields...
E F G H Use the following information to allocate costs using the direct, step, and...
E F G H Use the following information to allocate costs using the direct, step, and reciprocal methods: Not-A-Mega Bank has three service departments (Administration, Communications, and Facilities) and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows: Direct costs..... Employee hours Number of employees Square footage occupied... Administration Communications Facilities Deposits Loans $160,000 $240,000 $203,200 $6,730,000 $4,850,000 15,500...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Label P2 Department Subassemblies Final assembly Marketing Building occupancy Research & development Supervision Direct Costs $552,000 777,000 287,000 87,000 122,000 47,000 Use of services by other departments is as follows. Sub- Service Cost Center assemblies Building occupancy 0.30 R&D 0.50 Supervision 0.20 Final...
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Subassemblies Final assembly Marketing Building occupancy Research & development Direct Costs Label $554, 000 P1 779, 000 289, 000 89, 000 P2 P3 s1 124, 000 49, 000 S2 Supervision S3 Use of services by other departments is as follows. User Departments...
Requirement 2. Using the direct method, rework requirement 1 Using the direct method, allocate support-department costs. (Round cost allocations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Operating Departments Support Departments General Cafeteria Plant Operating Bldg and Storeroom Machining Grounds Personnel Admin. Loss Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Enter any number in the edit fields...
E F G H Use the following information to allocate costs using the direct, step, and reciprocal methods: Not-A-Mega Bank has three service departments (Administration, Communications, and Facilities) and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows: Direct costs..... Employee hours Number of employees Square footage occupied... Administration Communications Facilities Deposits Loans $160,000 $240,000 $203,200 $6,730,000 $4,850,000 15,500...
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