Desti Amalia 0942075

Juli Martini
Ratna Susilawati
Sarina
Yuliana
Fernando

Service depart
A
B
OH Cost
$100.000
$200.000
No of empl
8
7
maint hours 2.000
200
Machi hours Labor hours -

Producing depart
A
B
$100.000 $50.000
30
30
6.400
1.600
10.000
1.000
1.000
10.000

Department A (D.C) = 30/30+30 = 0.50 X S100,000 = $50,000

Department A (D.D) = 30/ 30+30 = 0.50 X S100,000 = $50,000

Department B (D.C) = 6400 /6400+1600 = 0.80 X S200,000 = $160,000

Department B (D.D) = 1600/6400+1600 = 0.20 X S200,000 = $40,000

What will the bid be for job K if the direct method

of allocation is used ?
Service Depart Producing Depart
A
B
C
D
Direct costs $100.000 $200.000
$100.000
$50.000
Depart A
(100.000)
50.000
50.000
Depart B
(200.000)
160.000
40.000
Totals
$ 0
$ 0
$310.000 $140.000

What will the bid be for job K if the

direct method of allocation in used ?
Department C : Overhead rate $310.000/10.000 = $31
per machine hour. Product cost and bid price:
Prime cost
$67
Overhead (3 x $31)
93
Total unit cost
$160
Bid price ($160 x 1.2)
$192

Department B (D.A) = 2000/ 2000+ 6400+1600 =0.20 X S200,000=$40,000

Department B (D.C) = 6400 2000+6400+1600=0.64 X S200,000=$128,000
Department B (D.D) = 1600/2000+6400+1600 =0.16 X S200,000=$32,00

Department A (D.C) = 30 /30+30 = 0.50 X $140,000 = $70,000

Department A (D.D) = 30 /30+30 = 0.50 X $140,000 = $70,000

Alocate the service costs to the producing depart

using the sequential method
Service Depart Producing Depart
A
B
C
200.000

Direct costs

100.000

100.000

50.000

Depart B
Depart A
Totals

40.000 (200.000)
128.000
(140.000)
70.000
0
0
298.000

32.000
70.000
152.000

What will the bid be for job K if the

sequential method is used?
Department C: Overhead rate $298.000/10.000 = $29.80
per machine hour. Product cost and bid price :
Prime cost
$67.00
Overhead (3 x $29.80) 89.40
Total unit cost
$156.40
Bid price ($156.40 x 1.2) $187.68

Allocate the service costs to the producing depart using

the reciprocal method
Proportion of output used by
A
B
C
D
A 0.1045 0.44775 0.44775
B 0.2000 0.6400 0.1600
A = 100.000 + 0.2000 B
B = 200.000 + 0.1045 A
A = 100.000 + 0.2 (200.000 + 0.1045A)
A = 100.000 + 40.000 + 0.0209 A
0.9791 A = 140.000
A = 142.988
B = 200.000 + 0.1045(142.988)
B = 214.942

Service Depart
A
B
Direct costs 100.000 200.000
Depart B
42.988 (214.942)
Depart A (142.988) 14.942
Totals
0
0

Producing Depart
C
D
100.000
137.563
64.023
301.586

50.000
34.391
64.023
148.414

What will the bid be for job K if the

reciprocal method is used?
Department C: Overhead rate = $301.586/10.000 = $30.16
per machine hour. Product cost and bid price :
Prime cost
$67.00
Overhead (3 x $30.16)
90.48
Total unit cost
$157.48
Bid price ($157.48 x 1.2) $188.98