Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations. Support Departments Operating Divisions Power General Factory Pottery Retail Overhead costs $150,000 $171,600 $97,000 $55,000 Machine hours 2,000 2,500 7,000 3,000 Square footage 2,500 1,700 4,000 6,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Required: 1. Allocate the support service costs using the direct method.
Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations.
Support Departments | Operating Divisions | ||||||
Power | General Factory | Pottery | Retail | ||||
Overhead costs | $150,000 | $171,600 | $97,000 | $55,000 | |||
Machine hours | 2,000 | 2,500 | 7,000 | 3,000 | |||
Square footage | 2,500 | 1,700 | 4,000 | 6,000 |
Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar.
Required:
1. Allocate the support service costs using the direct method.
Note: Input to two decimal places.
Allocation Ratios | Pottery | Retail |
Proportion of machine hours | fill in the blank 1 | fill in the blank 2 |
Proportion of square footage | fill in the blank 3 | fill in the blank 4 |
Cost Allocations | Pottery | Retail |
Power | $fill in the blank | $fill in the blank |
General Factory | fill in the blank | fill in the blank |
Direct costs | fill in the blank | fill in the blank |
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