COST13-14Cost_Allocation(成本管理会计-复旦__洪剑鞘).ppt

Allocating Support Departments Costs Reciprocal allocation method: Allocates costs by including the mutual services provided among all support departments. The direct method and the step-down method are less accurate than the reciprocal method when support departments provide services to one another reciprocally. Allocating Support Departments Costs The following information pertains to the Toledo Division of Sandy Corporation: Recall that the Toledo Division has two operating departments – Assembly and Finishing, and two support departments – Maintenance and Human Resources. Allocating Support Departments Costs Total square feet = 255,000 Total number of employees = 95 Maintenance is allocated using square feet. Human Resources is allocated using number of employees. Allocating Support Departments Costs Human Maintenance Resources Budgeted costs before allocations: $300,000 $2,160,000 Square feet: 5,000 30,000 Number of employees: 8 15 Allocating Support Departments Costs Assembly Finishing Budgeted costs before allocations: $1,700,000 $900,000 Square feet: 110,000 110,000 Number of employees: 48 24 Direct Method... allocates support department costs to operating departments only. The allocation ratio for allocating Maintenance to Assembly is 110,000/220,000 x $300,000 = $150,000. The allocation ratio for allocating Maintenance to Finishing is 110,000/220,000 x $300,000 = $150,000. Direct Method The allocation ratio for allocating Human Resources to Assembly is 48/72 × $2,160,000 = $1,440,000. The allocation ratio for allocating Human Resources to Finishing is 24/72 × $2,160,000 = $720,000. Direct Method Assembly Finishing Original costs: $1,700,000 $ 900,000