Asked by Austin Deaver on Jul 13, 2024
Verified
Departmental information for the four departments at Samoa Industries is provided below. The Janitorial and Cafeteria departments are support departments. Determine the proportional (percentage) usage of the Janitorial Department by the (a) Cutting and (b) Assembly departments using the direct method.
Support Departments
Units within an organization that provide essential services or support to the production or primary departments but do not directly engage in the main activity of the business.
Proportional Usage
The allocation of resources, costs, or efforts in relation to the direct usage or benefit obtained from those resources.
Direct Method
A means of reporting cash flows from operating activities that presents specific cash inflows and outflows directly rather than using the indirect method adjustments.
- Analyze the process of allocating support department costs using direct, reciprocal, and sequential methods.
Verified Answer
b. 16,000 ÷ (4,000 + 16,000) = 80%
Learning Objectives
- Analyze the process of allocating support department costs using direct, reciprocal, and sequential methods.
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