Required Information [The following information applies to the questions displayed below.] Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 S1 Overhead Assigned $ 156,000 259,000 78,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of S1 output used P1 b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. 60 5,400 45,150 60% P2 20 6,600 83,850 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base.

Required Information [The following information applies to the questions displayed below.] Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. Department P1 P2 S1 Overhead Assigned $ 156,000 259,000 78,000 Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of S1 output used P1 b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. 60 5,400 45,150 60% P2 20 6,600 83,850 40% Required: 1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department: a. Using employee headcount as the allocation base.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [The following information applies to the questions displayed below.] Great Ape Glassworks manufactures glass used for the screens on smartphones. It has two producing departments, P1 and P2, and only one service department, S1. The company is able to track overhead to the various departments but wants to allocate the service department costs to the producing departments. However, the company is not sure which of the multiple allocation bases should be selected. The data it collected appear in the table below. O Department P1 P2 s1 W Potential allocation base Employee headcount Space used (in square feet) Productive capacity (in units) 3-year average percentage of S1 output used a. Using employee headcount as the allocation base. b. Using occupied space as the allocation base. c. Using productive capacity as the allocation base. d. Using the 3-year average use as the allocation base. a. Using employee headcount as the allocation base b. Using occupied space as the…
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