Allocating Service Department Costs: Allocation Basis AlternativesWeld-Rite Fabricators has two producing departments, P1 and P2, and one service department, S1.Estimated directed overhead costs per month are as follows:P1 $450,000P2 750,000$1 273,000Other data follow:Numbers of employeesProduction capacity (units)Space occupied (square feet)Five-year average of $1's service output usedP1P215050100,000 60,0005,000 15,00065% 35%For each of the following allocation bases, determine the total estimated overhead cost for P1 and P2 after allocating 51 cost to the producing departments.1. Based on number of employees$P1P2$2. Production capacity in units3. Space occupied4.Five-year average of $1 service used627,450✔845,550✔5. Estimated direct overhead costs

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Description: Allocating Service Department Costs: Allocation Basis AlternativesWeld-Rite Fabricators has two producing departments, P1 and P2, and one service department, S1.Estimated directed overhead costs per month are as follows:P1 $450,000P2 750,000$1 273,0

Cost allocation is the process of assigning indirect costs to specific cost objects or activities.…

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Allocating Service Department Costs: Allocation Basis Alternatives Weld-Rite Fabricators has two producing departments, P1 and P2, and one service department, S1. Estimated directed overhead costs per month are as follows: P1 $450,000 P2 750,000 $1 273,000 Other data follow Numbers of employees Production capacity (units) Space occupied (square feet) Five year average of 51's service output used P1 P2 150 50 100,000 60,000 5,000 15,000 65% 35% For each of the following allocation bases, determine the total estimated overhead cost for P1 and P2 after allocating 51 cost to the producing departments. 1. Based on number of employees $ PL S P2 2. Production capacity in units 3.Space occupied 4. Five year average of $1 service used 627,450 845,550 5. Estimated direct overhead costs

Allocating Service Department Costs: Allocation Basis Alternatives Weld-Rite Fabricators has two producing departments, P1 and P2, and one service department, S1. Estimated directed overhead costs per month are as follows: P1 $450,000 P2 750,000 $1 273,000 Other data follow Numbers of employees Production capacity (units) Space occupied (square feet) Five year average of 51's service output used P1 P2 150 50 100,000 60,000 5,000 15,000 65% 35% For each of the following allocation bases, determine the total estimated overhead cost for P1 and P2 after allocating 51 cost to the producing departments. 1. Based on number of employees $ PL S P2 2. Production capacity in units 3.Space occupied 4. Five year average of $1 service used 627,450 845,550 5. Estimated direct overhead costs

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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