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Problem 17-24 Student Name:
Class:
1. Direct Method
Production Department
Etching Finishing
Cost to Be
Provider of Service Allocated Proportion Amount Proportion Amount
Maintenance * * * * *
Computing * * * * *
Total service department costs allocated * *
Overhead costs traceable to production departments * *
Total overhead cost * *
Direct-labor hours (DLH) * *
Overhead rate per hour * *
Check on allocation procedure:
Service department costs allocated to Etching *
Service department costs allocated to Finishing *
Total costs to be allocated *
2. Step-down method:
Service Departments Production Departments
Computing Maintenance Etching Finishing
Costs prior to allocation * *
Allocation of Computing Department costs * * * * * * *
Allocation of Maintenance Department costs * * * * *
Total service department costs allocated * *
Overhead costs traceable to production departments * *
Total overhead cost * *
Direct-labor hours (DLH) * *
Overhead rate per hour * *
Check on allocation procedure:
Service department costs allocated to Etching *
Service department costs allocated to Finishing *
Total costs to be allocated *
Problem 17-24 Student Name:
Class:
1. Direct Method
Production Department
Etching Finishing
Cost to Be
Provider of Service Allocated Proportion Amount Proportion Amount
Maintenance 96,000$ 1/9 10,667$ 8/9 85,333$
2. Step-down method:
Service Departments Production Departments
Computing Maintenance Etching Finishing
Costs prior to allocation 500,000$ 96,000$
Allocation of Computing Department costs 500,000 100,000 2/10 350,000$ 7/10 50,000$ 1/10
Allocation of Maintenance Department costs 196,000 21,778 1/9 174,222 8/9
Instructor
McGraw-Hill/Irwin
