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Posted: June 15th, 2022
Allocate the support department cost to operating department
ACCT 301Q1. Allocate the support department cost to operating department using Direct Method.The information for the recent period is as follows:(3 Marks)CostSupport DepartmentOperating DepartmentAdministration Housekeeping MedicalDental3240048600127,000106,000Total314,000Possible Allocation Bases:No. ofEmployeesSquareFeetSupport DepartmentOperating DepartmentAdministration Housekeeping MedicalDentalTotal2253900100800010001210,000Administration Cost will be allocated using number of employees and Housekeepingcost will be allocated using square feet.Q2. Explain the three methods to allocate support department costs to operatingdepartments.(2 Marks)Q3. Describe the split-off point and explain its significance for joint product costing.Methods to allocate joint costs often require use of estimates. Which of the following twomethods is likely to involve the most uncertainty? Explain.(2 Marks)a. Physical output methodb. Net realizable valueQ4. Distinguish between support department costs and manufacturing overhead costs.(1 Mark)Q5. Why would managers want to develop and monitor standards for expected contributionmargins?(2 Marks)
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