Presentation is loading. Please wait.

Presentation is loading. Please wait.

The Need for Cost Allocations First Stage Allocations Service department costs are allocated to operating departments. Service Department (Cafeteria) Service.

Published byErik Lucas Modified over 9 years ago

Similar presentations

Presentation on theme: "The Need for Cost Allocations First Stage Allocations Service department costs are allocated to operating departments. Service Department (Cafeteria) Service."— Presentation transcript:

1 The Need for Cost Allocations First Stage Allocations Service department costs are allocated to operating departments. Service Department (Cafeteria) Service Department (Accounting) Service Department (Personnel) Operating Department (Machining) Operating Department (Assembly) The Products Next Page Click Here

2 The Need for Cost Allocations Service Department (Cafeteria) Service Department (Accounting) Service Department (Personnel) Operating Department (Machining) Operating Department (Assembly) The Products Next Page Click Here Second Stage Allocations Operating department overhead costs and allocated service department costs are applied to products.

3 Interdepartmental Services Problem Allocating costs when service departments provide services to each other Problem Allocating costs when service departments provide services to each other Solutions Direct Method Step Method Reciprocal Method Covered here Next Page Click Here

4 Direct Method Service Department (Cafeteria) Service Department (Custodial) Operating Department (Machining) Operating Department (Assembly) DIRECT METHOD Cost of services between service departments are ignored, and all costs are allocated directly to operating departments. Next Page Click Here

5 Direct Method Example Next Page Click Here

6 Direct Method Example $360,000 × 20 20 + 30 = $144,000 Allocation base: Number of employees Next Page Click Here

7 Direct Method Example $360,000 × 30 20 + 30 = $216,000 Allocation base: Number of employees Next Page Click Here

8 Direct Method Example $90,000 × 25,000 25,000 + 50,000 = $30,000 Allocation base: Square feet occupied Next Page Click Here

9 Direct Method Example Allocation base: Square feet occupied $90,000 × 50,000 25,000 + 50,000 = $60,000 Next Page Click Here

Download ppt "The Need for Cost Allocations First Stage Allocations Service department costs are allocated to operating departments. Service Department (Cafeteria) Service."

Similar presentations

Basics of Job-Order Costing

Basics of Job-Order Costing
Overhead distribution.

Overhead distribution.
Copyright © 2012 McGraw-Hill Ryerson Limited 4-1 PowerPoint Author: Robert G. Ducharme, MAcc, CA University of Waterloo, School of Accounting and Finance.

Copyright © 2012 McGraw-Hill Ryerson Limited 4-1 PowerPoint Author: Robert G. Ducharme, MAcc, CA University of Waterloo, School of Accounting and Finance.
7-1 Copyright © 2004 by Nelson, a division of Thomson Canada Limited. Support Department Cost Allocation 7 PowerPresentation® prepared by David J. McConomy,

7-1 Copyright © 2004 by Nelson, a division of Thomson Canada Limited. Support Department Cost Allocation 7 PowerPresentation® prepared by David J. McConomy,
Systems Design: Process Costing. Similarities Between Job-Order and Process Costing  Both systems assign material, labor and overhead costs to products.

Systems Design: Process Costing. Similarities Between Job-Order and Process Costing  Both systems assign material, labor and overhead costs to products.
 Why allocate costs to departments?  Three methods of allocation.  Cost allocation issues. Overview 4 & 12 Service Department Costing: An Activity Approach.

 Why allocate costs to departments?  Three methods of allocation.  Cost allocation issues. Overview 4 & 12 Service Department Costing: An Activity Approach.
15 - 1 ©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster Allocation of Support Department Costs, Common Costs, and Revenues.

©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster Allocation of Support Department Costs, Common Costs, and Revenues.
Allocation of Support Activity Costs and Joint Costs

Allocation of Support Activity Costs and Joint Costs
© 2012 McGraw-Hill Education (Asia) Cost Allocation Chapter 6.

© 2012 McGraw-Hill Education (Asia) Cost Allocation Chapter 6.
Service Department Costing: An Activity Approach

Service Department Costing: An Activity Approach
JEOPARDY Click here and type Category 1 Click here and type Category 2 Click here and type Category 2 Click here and type Category 3 Click here and type.

JEOPARDY Click here and type Category 1 Click here and type Category 2 Click here and type Category 2 Click here and type Category 3 Click here and type.
© 2010 The McGraw-Hill Companies, Inc. Systems Design: Process Costing Chapter 4.

© 2010 The McGraw-Hill Companies, Inc. Systems Design: Process Costing Chapter 4.
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Allocation of Support Activity Costs and Joint Costs 18 Chapter.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Allocation of Support Activity Costs and Joint Costs 18 Chapter.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005 21-1 Cost Allocation and Performance Measurement Chapter 21 Modified from Publisher Provided.

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., Cost Allocation and Performance Measurement Chapter 21 Modified from Publisher Provided.
© The McGraw-Hill Companies, Inc., 2007 McGraw-Hill/Irwin Chapter 21 Cost Allocation and Performance Measurement.

© The McGraw-Hill Companies, Inc., 2007 McGraw-Hill/Irwin Chapter 21 Cost Allocation and Performance Measurement.
Copyright 1998 Dekker, Ltd. 1. Copyright 1998 Dekker, Ltd. 2.

Copyright 1998 Dekker, Ltd. 1. Copyright 1998 Dekker, Ltd. 2.
Copyright © 2008, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Chapter Four Systems Design: Process Costing.

Copyright © 2008, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Chapter Four Systems Design: Process Costing.
AFM 31130 AFM 31130 Cost Assignment and Costing Systems By Isuru Manawadu B.Sc in Accounting Sp. (USJP), ACA 1 1.

AFM AFM Cost Assignment and Costing Systems By Isuru Manawadu B.Sc in Accounting Sp. (USJP), ACA 1 1.
PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Copyright.

PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Copyright.
© The McGraw-Hill Companies, Inc., 2002 Slide 22-1 McGraw-Hill/Irwin 22 Cost Allocation and Performance Measurement.

© The McGraw-Hill Companies, Inc., 2002 Slide 22-1 McGraw-Hill/Irwin 22 Cost Allocation and Performance Measurement.

Similar presentations

Ads by Google