Using the step method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments. Assuming Natasha allocates the accounting costs first, how much in support costs would be allocated to assembly?

Question

Using the step method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments.  Assuming Natasha allocates the accounting costs first, how much in support costs would be allocated to assembly?

Quizplus · Accepted Answer

25 + 120 + 40 = 185
25 ÷ 185 x $105,000 = $14,189
40 ÷ 185 x $105,000 = $22,703
$14,189 + $25,000 = $39,189
8,000 + 4,000 = 12,000
4,000 ÷ 12,000 x $39,189 = $13,063
$13,063 + $22,703 = $35,766
Cust # of empl + mach # of empl + assm # of empl = total # of empl
Cust # of empl ÷ total # of empl = acct cost alloc to cust
assm # of empl ÷ total # of empl = acct cost alloc to assm
acct cost alloc to cust + cust costs = cust costs to alloc
Mach sq ft + assm sq ft = total sq ft
assm sq ft ÷ total sq ft x cust costs to alloc = cust costs alloc to assm
cust costs alloc to assm + acct cost alloc to mach = total sup costs to assm

Using the Step Method, Natasha Allocates Custodial Department Costs Based