第三章间接成本的分配讲述.ppt

* While sales dollars is a popular allocation base for service department costs, it is a poor choice because sales dollars fluctuate from period to period, and the costs being allocated are often largely fixed. Allocation of service department costs based on sales can create a situation where the sales of one departmentinfluence the service department costs allocated to other departments. * Let’s look at an example to illustrate the pitfalls of allocating service department costs based on sales revenue. Clothier Inc., a men’s clothing store has one service department and three sales departments, Suits, Shoes, and Accessories. Service department costs total $60,000 for both years in the example. Contrary to good practice, Clothier allocates the service department costs based on sales. * Part I We will focus on the Suit Department in this example. In the first year, Suit Department sales are two hundred sixty thousand dollars of the four hundred thousand dollars of total sales. Two hundred sixty thousand dollars is sixty-five percent of four hundred thousand dollars. We allocate the service department costs to the Suit Department by multiplying sixty-five percent times sixty thousand dollars. The result is thirty-nine thousand dollars. Part II In the next year, the manager of the Suit Department increased sales by $100,000. Sales in the other departments are unchanged. Let’s allocate the $60,000 service department cost for the second year given the sales increase. * In the second year, Suit Department sales are three hundred sixty thousand dollars of the five hundred thousand dollars of total sales. Three hundred sixty thousand dollars is seventy-two percent of five hundred thousand dollars. We allocate the service department costs to the Suit Department by multiplying seventy-two percent times sixty thousand dollars. The result is forty-three thousand two hundred dollars. The allocation of service department costs to the Suit Department increased