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Business, 05.09.2020 23:01 kmcgregor4155
Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:
Support Department Cost Driver
Janitorial Department Square footage to be serviced
Cafeteria Department Number of employees
Janitorial Department Cafeteria Department Cutting Department Assembly Department
Department costs $310,000 $169,000 $1,504,000 $680,000
Square feet 50 5,000 1,000 4,000
Number of employees 10 3 30 10
Allocated the support department costs to the production departments using the direct method below.
Cutting Department Assembly Department
Janitorial Department cost allocation $62,000 $248,000
Cafeteria Department cost allocation $126,750 $42,250
Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.
Cafeteria Department Cutting Department Assembly Department
Janitorial Department cost allocation $155,000 $31,000 $124,000
Cafeteria Department cost allocation $243,000 $81,000
Compare the total support department costs allocated to each production department under each cost allocation method.
Required:
a. Which production department is allocated the most support department costs under the direct method?
b. Which production department is allocated the most support department costs under the sequential method?
c. Which production department is allocated the most support department costs under the reciprocal services method?
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