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  • S1: Support Departments: S1: Support Departments: S2: A-Base A: Number of Samples S2: A-Base A: Number of Samples S3: A - S3: B-S4: A S4: B

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    Minh Châuu
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    The document compares two methods for allocating support department overhead costs: the direct method and sequential method. Under the direct method (a), support departments A and B have their costs directly allocated to operating departments C and D based on cost drivers. Under the sequential method (b), support department costs are allocated sequentially from A to B to C and D, with allocation rates determined based on department cost bases relative to total cost bases at each step.

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    Bai2-L6

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    The document compares two methods for allocating support department overhead costs: the direct method and sequential method. Under the direct method (a), support departments A and B have their costs directly allocated to operating departments C and D based on cost drivers. Under the sequential method (b), support department costs are allocated sequentially from A to B to C and D, with allocation rates determined based on department cost bases relative to total cost bases at each step.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    4 views3 pages

    S1: Support Departments: S1: Support Departments: S2: A-Base A: Number of Samples S2: A-Base A: Number of Samples S3: A - S3: B-S4: A S4: B

    Uploaded by

    Minh Châuu
    The document compares two methods for allocating support department overhead costs: the direct method and sequential method. Under the direct method (a), support departments A and B have their costs directly allocated to operating departments C and D based on cost drivers. Under the sequential method (b), support department costs are allocated sequentially from A to B to C and D, with allocation rates determined based on department cost bases relative to total cost bases at each step.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 3

    a) Direct Method b) Sequential Method

    S1: Support Departments: A B (A: Delivery B: Accounting) S1: Support Departments:


    Operating Departments: C D (C: Laboratory D: Tissue Pathology) Operating Departments:
    S2: A-Base A: Number of samples S2: A-Base A: Number of sam
    B-Base B: Transaction Processed B-Base B: Transaction Pro
    S3: A - C D S3: B-
    B- C D A' -
    S4: A Base C/Base C+Base D Base D/Base C+bBase D S4: B
    70200/(70200+46800) 46800/(70200+46800)
    0.6 0.4
    B Base C/Base C+Base D Base D/Base C+Base D A'
    24700/(24700+13300) 13300/(24700+13300)
    0.65 0.35
    C D
    A 0.6 0.4 B
    B 0.65 0.35 A'
    S5: A B C D S5:
    Ovehead Co 240000 270000 345000 456000 Overhead C
    A 240000 - 144000 96000 B
    B - 270000 175500 94500 A'
    Total 0 0 664500 646500 Total
    b) Sequential Method
    S1: Support Departments: A B (A: Delivery B: Accounting)
    Operating Departments: C D (C: Laboratory D: Tissue Pathology)
    S2: A-Base A: Number of samples
    B-Base B: Transaction Processed
    A C D (Becase Cost B>Cost A)
    - C D
    Base A/(BaseA+BaseC+BaseD) Base C/(BaseA+BaseC+BaseD) Base D/(BaseA+BaseC+BaseD)
    2000/(2000+24700+13300) 24700/(2000+24700+13300) 13300/(2000+24700+13300)
    0.05 0.6175 0.3325
    - Base C/(BaseC+BaseD) Base C/(BaseC+BaseD)
    70200/(70200+46800) 46800/(70200+46800)
    0.6 0.4
    A C D
    0.05 0.6175 0.3325
    - 0.6 0.4
    B A C D
    270000 240000 345000 456000
    270000 13500 166725 89775
    - 253500 152100 101400
    0 0 663825 647175
    Cost B>Cost A)

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