Bower Company manufactures a product in a factory that has two producing departments, Cutting and Stitching, and two support departments, D1 and D2. The activity driver for D1 is number of employees, and the activity driver for D2 is number of machine hours. The following data pertain to Bower:
Required:
A. Calculate the cost assignment ratios to be used under the direct method for departments D1 and D2.
B. Allocate the support department costs to the producing departments by using the direct method.

Question

Bower Company manufactures a product in a factory that has two producing departments, Cutting and Stitching, and two support departments, D1 and D2. The activity driver for D1 is number of employees, and the activity driver for D2 is number of machine hours. The following data pertain to Bower:
  Required:
A. Calculate the cost assignment ratios to be used under the direct method for departments D1 and D2.
B. Allocate the support department costs to the producing departments by using the direct method.

Quizplus · Accepted Answer

The Answer of Bower Company manufactures a product in a factory that has two producing departments, Cutting and Stitching, and two support departments, D1 and D2. The activity driver for D1 is number of employees, and the activity driver for D2 is number of machine hours. The following data pertain to Bower:
  Required:
A. Calculate the cost assignment ratios to be used under the direct method for departments D1 and D2.
B. Allocate the support department costs to the producing departments by using the direct method.

Bower Company Manufactures a Product in a Factory That Has