FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Required information
[The following information applies to the questions displayed below.]
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These
products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for
large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.
Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two
support departments, systems design and programming services. The sources and uses of the support department time
are summarized as follows:
From
Design Programming Department A Department B
5,000
400
Design
Programming
The costs in the two service departments are as follows:
Labor and materials (all variable)
Depreciation and other fixed costs
Total
To
a. Direct Method
b. Step Method (Design Department goes first)
c. The Reciprocal Method (using Solver)
1,000
600
Design
$ 86,000
61,600
$ 147,600
$
$
$
Department A
Required:
1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method
(design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount.)
Answer is complete but not entirely correct.
Department
B
9,000
1,000
Programming
$ 57,600
4,000
$ 61,600
37,860 $
51,390 $
70,780 X $
Total
Total
Labor
Hours
15,000
2,000
209,200
171,340 $
157,810 $
209,200
271,380 $ 342,160](https://content.bartleby.com/qna-images/question/66ddbf34-fa2b-4bd0-b093-47642ffd3574/9835237e-2f78-42fb-aeb3-cd88852248a1/qrzyif_processed.jpeg)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These
products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for
large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades.
Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two
support departments, systems design and programming services. The sources and uses of the support department time
are summarized as follows:
From
Design Programming Department A Department B
5,000
400
Design
Programming
The costs in the two service departments are as follows:
Labor and materials (all variable)
Depreciation and other fixed costs
Total
To
a. Direct Method
b. Step Method (Design Department goes first)
c. The Reciprocal Method (using Solver)
1,000
600
Design
$ 86,000
61,600
$ 147,600
$
$
$
Department A
Required:
1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method
(design department goes first), and (c) the reciprocal method. (Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount.)
Answer is complete but not entirely correct.
Department
B
9,000
1,000
Programming
$ 57,600
4,000
$ 61,600
37,860 $
51,390 $
70,780 X $
Total
Total
Labor
Hours
15,000
2,000
209,200
171,340 $
157,810 $
209,200
271,380 $ 342,160
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