Allocate the cost of the service departments to the operating departments using the direct method.
Allocate the cost of the service departments to the operating departments using the step method. Start with Administration.
Allocate the cost of the service departments to the operating departments using the reciprocal method.
Comment on the results.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:
Competency 3: Use cost accounting concepts to operate job, process, and activity-based cost systems.
Prepare production cost report.
Determine predetermined overhead rate for each cost driver using the estimated costs and estimated cost driver units, and predetermined rate for using direct labor-hours as the allocation base.
Explain use of new material and quality improvement.
Allocate service department cost using direct, step, and reciprocal methods.
Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.