Logan Products has two production departmentsassembly and finishing. These are supported by two service departmentssourcing...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Logan Products has two production departmentsassembly and finishing. These are supported by two service departmentssourcing (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
Operations
Assembly
Finishing
Sourcing
-
20,000
40,000
60,000
Operations
10,000
-
60,000
50,000
The costs incurred in the plant are as follows:
Departments
Departmental Costs
Sourcing
$ 210,000
Operations
280,000
Assembly
440,000
Finishing
285,000
Total
$ 1,215,000
Required:
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.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
