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Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Sourcing Operations Total Labor Hours Used by Departments Sourcing Operations 20,000 10,000 Assembly 40,000 60,000 Finishing 60,000 50,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Departmental Costs $210,000 280,000 440,000 285,000 $ 1,215,000 Finishing Total Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Direct Method Assembly Finishing Answer is complete but not entirely correct. Total Service Department Cost Allocated Total Production Cost $ 236,727 $ 676,727 253,273 538,273 b. Step Method Assembly 241,818 681,818 Finishing 248,182 533,182 c Reciprocal Method Assembly 268,856 708,886 Finishing 287,170 ( 572,170

Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Sourcing Operations Total Labor Hours Used by Departments Sourcing Operations 20,000 10,000 Assembly 40,000 60,000 Finishing 60,000 50,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Departmental Costs $210,000 280,000 440,000 285,000 $ 1,215,000 Finishing Total Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Direct Method Assembly Finishing Answer is complete but not entirely correct. Total Service Department Cost Allocated Total Production Cost $ 236,727 $ 676,727 253,273 538,273 b. Step Method Assembly 241,818 681,818 Finishing 248,182 533,182 c Reciprocal Method Assembly 268,856 708,886 Finishing 287,170 ( 572,170

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...
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Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Total Labor Hours Used by Departments Sourcing Sourcing Operations Operations 20,000 10,000 Assembly 40,000 60,000 Finishing 60,000 50,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Departmental Costs $210,000 280,000 440,000 285,000 $ 1,215,000 Finishing Total Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Direct Method Assembly Finishing Answer is complete but not entirely correct. Total Service Department Cost Allocated Total Production Cost $ 236,727 $ 676,727 253,273 538,273 b. Step Method Assembly 241,818 681,818 Finishing 248,182 533,182 c Reciprocal Method Assembly 268,856 708,886 Finishing 287,170 ( 572,170
Transcribed Image Text:Logan Products has two production departments-assembly and finishing. These are supported by two service departments-sourcing (purchasing and handling of materials and human resources) and operations (work scheduling, supervision, and inspection). Logan has the following labor hours devoted by each of the service departments to the other departments. Total Labor Hours Used by Departments Sourcing Sourcing Operations Operations 20,000 10,000 Assembly 40,000 60,000 Finishing 60,000 50,000 The costs incurred in the plant are as follows: Departments Sourcing Operations Assembly Departmental Costs $210,000 280,000 440,000 285,000 $ 1,215,000 Finishing Total Required: 1. What are the costs allocated to the two production departments using (a) the direct method, (b) the step method, when the sourcing department that provides the greatest percentage of services to other service departments goes first, and (c) the reciprocal method? 2. What are the total costs in the production departments after allocation? (For all requirements, do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Direct Method Assembly Finishing Answer is complete but not entirely correct. Total Service Department Cost Allocated Total Production Cost $ 236,727 $ 676,727 253,273 538,273 b. Step Method Assembly 241,818 681,818 Finishing 248,182 533,182 c Reciprocal Method Assembly 268,856 708,886 Finishing 287,170 ( 572,170
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