K L M N O P B6 : x V for А в F G H I J 1 Part 1 2 Pottery Inc., is divided into 2 operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. 3 Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. 4 Allocation for the coming year are based on the following data? Support Departments Operating Divisions General factory Power Department Department Pottery Retail Direct costs $150,000 $160,000 $98,000 $56,000 Normal Activity: Machine Hours 1000 6,900 3,100 11 Square Footage 2000 4000 6,000 12 13 Please make sure you review Cornerstone 7.3 and 7.4 before attempting this part of the project. 14 For all requirements, round allocation ratios to four significant digits and round allocated costs to the nearest dollar. 15 16 Required: Complete 1-5 below and all computations below must use cell references. 17 1. Calculate the allocation ratios for the departments using the direct method in the table provided below. 18 Power Department General factory 19 Pottery Retail Department Power Department General factory Department 22 23 2. Using the direct method, allocate the costs of the Power Department and General Factory Department to the Pottery 24 and Retail departments in the table provided below. 1 Project 3 Part 1 Part 2 Budget Template + Ready 9 – N O P B6 : x v for А в J K L M 23 2. Using the direct method, allocate the costs of the Power Department and General Factory Department to the Pottery 24 and Retail departments in the table provided below. 25 General factory Power Department Pottery Retail Department Direct costs $150,000 $160.000 $98,000 $56,000 Allocate: Power Department General factory Department Total After Allocation 32 33 3. Determine the support department to allocate first, by ranking the support departments in order of the percentage of service provided to the other support department. 34 35 36 37 38 4. Develop a table with the allocation ratios for the departments using the sequential (step) method showing the support department first that provides the greater service to the other support department. 39 40 41 42 43 44 5. Using the sequential method, allocate the costs of the power department and general factory department to the pottery 45 and retail departments in the table provided below. 46 General factory Pottery Retail Project 3 Part 1 Power Denartment Part 2 Budget Template Ready 0 – – + 10 B6 N O P ДА В F G H I J K L M 35 36 37 38 4. Develop a table with the allocation ratios for the departments using the sequential (step) method showing the support department first that provides the greater service to the other support department. 39 40 41 42 43 44 5. Using the sequential method, allocate the costs of the power department and general factory department to the pottery 45 and retail departments in the table provided below. 46 General factory Power Department Pottery Retail Department Direct costs $150,000 $160,000 $98,000 $56,000 Allocation: Total After Allocation

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