Support department cost allocation Blue Mountain Masterpieces produces pictures, paintings, and other home decor. The Printing and Framing production departments are supported by the Janitorial and Security departments. Janitorial costs are allocated to the production departments based on square feet, and security costs are allocated based on asset value. Information about these departments is detailed in the following table: Janitorial Department 760 $900 $5,200 Security Department 1,040 $1,240 $6,600 a. Direct cost allocation method. b. Sequential cost allocation method. c. Reciprocal cost allocation method. d. None of the above. -X Printing Department 4,230 $12,390 $33,000 Framing Department 4,770 $8,610 $29,000 Square feet Asset value Department cost Management has experimented with different support department cost allocation methods in the past. The different allocation methods did not yield large differences of cost allocation to the production departments. 1. Determine which support department cost allocation method Blue Mountain Masterpieces would most likely use to allocate its support department costs to the production departments. 2. Determine the total costs allocated from each support department to each production department using the method you determined in part (1).
Support department cost allocation Blue Mountain Masterpieces produces pictures, paintings, and other home decor. The Printing and Framing production departments are supported by the Janitorial and Security departments. Janitorial costs are allocated to the production departments based on square feet, and security costs are allocated based on asset value. Information about these departments is detailed in the following table: Janitorial Department 760 $900 $5,200 Security Department 1,040 $1,240 $6,600 a. Direct cost allocation method. b. Sequential cost allocation method. c. Reciprocal cost allocation method. d. None of the above. -X Printing Department 4,230 $12,390 $33,000 Framing Department 4,770 $8,610 $29,000 Square feet Asset value Department cost Management has experimented with different support department cost allocation methods in the past. The different allocation methods did not yield large differences of cost allocation to the production departments. 1. Determine which support department cost allocation method Blue Mountain Masterpieces would most likely use to allocate its support department costs to the production departments. 2. Determine the total costs allocated from each support department to each production department using the method you determined in part (1).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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