StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Allocation of Costs - Coursework Example

Cite this document
Summary
By multiplying the labor_hours by the labor_cost per_hour, the total labor_cost is generated. For the maintenance aspect, the total labor_cost…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.7% of users find it useful
Allocation of Costs
Read Text Preview

Extract of sample "Allocation of Costs"

May 25, Allocation of_Costs A: Activity_based costing Table shows (appendix section) the allocation of the maintenance_department labor_cost using the activity_based cost (Epstein, 2011). By multiplying the labor_hours by the labor_cost per_hour, the total labor_cost is generated. For the maintenance aspect, the total labor_cost is $120,000. For the repair activities, the total labor_cost is $72,000. The total labor_cost of the entire company is $192,000.00.Allocation of Maintenance Supplies Cost Table 2 (appendix section) shows the financial allocation of the maintenance_department’s supply cost_allocation.

The allocation is grounded on the actual supplies that were used each department. For the pharmacy, the allocation is arrived at using the formula: (200/80,000) x $100,000. The other departments’ share of the $100,000 maintenance supply_costs is: $ 79,800/80,000) x $ 100,000 (Finkler et al., 2013). Allocation of Maintenance Administration Cost Table 3 (Appendix section) shows the allocation of the maintenance_department administration_costs (Finkler et al., 2013). The costs are allocated using the volume of repairs output of Pharmacy department_and resources.

The pharmacy department formula is: (3/800)x$15,000. The formula for the other departments’ share of the maintenance_department’s administration_costs was generated using the formula: (797/800)x15,000=$14,977.00 (Epstein, 2011). Summary of maintenance_department’s costs allocationThe table 4 shows the breakdown of the maintenance departments’ allocation to the Pharmacy and other departments (Epstein, 2011). B: Absorption_Costing Table 5 (appendix section) shows the allocation of the maintenance_department costs (Finkler et al., 2013). The costs are allocated based on the square_feet factor.

For example, the maintenance_department’s labor_cost allocated to the pharmacy department was computed using: (2,000/100,000)*192,000.00= $3,840.00. References:Epstein, M. (2011). Advances in Management Accounting. New York: Emerald Press.Finkler et al., (2013). Financial Management for Public, Health, and Not-For-Profit Organizations . Upper Saddle River: Pearson Press.AppendixTable 1Allocation of Maintenance Labor CostComputationMaintenanceRepairsTotalLabor hours10,0004,00014,000Labor Cost/Hr12.0018.0013.

71Total Labor Cost120,00017,000192,000Table 2:Allocation of Maintenance Supplies CostDescriptionPharmacyOther DepartmentsTotalActual Department supplies20079,80080,000.00Allocation (maintenance supply cost)(200/80,000)x 100,000(79/800/80,000)x 100,000100,000.00Table 3Allocation of Maintenance Administration CostDescriptionPharmacyOther DepartmentsTotalVolume Repairs3797800Allocation of Maintenance Administration Cost(3/800)x 15,000(797/800) x15,00015,000.00Table 4Summary of maintenance costs’ allocationCostsPharmacyOther DepartmentsTotal Maintenance Department CostsLabor288.00191,712.00192,000.

00Supplies250.0099,750.00100,000.00Administration22.5014,977.5015,000.00Total560.6306,439.50307,000.00Table 5Absorption_CostingCostsPharmacyOther DepartmentsTotal Maintenance Department CostsSquare feet2,000.0098,000.00100,000.00Labor Costs3,840.00188,160.00192,00.00Supplies2,000.0098,000.00100,000.00Administration300.0014,700.0015,000.00Total 6,140.00300,860.00307,000.00

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Allocation of Costs Coursework Example | Topics and Well Written Essays - 250 words”, n.d.)
Allocation of Costs Coursework Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/finance-accounting/1695580-allocation-of-costs
(Allocation of Costs Coursework Example | Topics and Well Written Essays - 250 Words)
Allocation of Costs Coursework Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/finance-accounting/1695580-allocation-of-costs.
“Allocation of Costs Coursework Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/finance-accounting/1695580-allocation-of-costs.
  • Cited: 0 times

CHECK THESE SAMPLES OF Allocation of Costs

Activity Based Costing

Total costs/No of orders places $40,000 10 90 900 Cost drive is the number of orders placed Department Stores = $40,000 * 10/1000= $400 Specialty Shops = $40,000 * 90/1000 = $ 3,600 Gift Shops = $40,000 * 900/1000 = $ 36,000 (Finkler, Ward & Baker, 2007) Total costs/No of sales calls 80,000 5 195 800 Cost drive is the number of sales calls Department Stores = $80,000 * 5/1000= $400 Specialty Shops = $80,000 * 195/1000 = $ 15,600 Gift Shops = $80,000 * 800/1000 = $ 64,000 Total costs/No of shipments 60,000 20 480 1,000 Department Stores = $60,000 * 20/1500= $800 Specialty Shops = $60,000 * 480/1500 = $ 19,200 Gift Shops = $60,000 * 1000/1500 = $ 40,000 allocation of other costs is based on the...
4 Pages (1000 words) Essay

Reallocation of Costs in Information Technology

(Apptio, 2010) Organization's Decision Affecting Cost Allocation An organization defines its cost structure and Allocation of Costs on the basis of various factors.... Reallocation of costs in Information Technology Reallocation of costs in Information Technology Introduction With the rapid technological advances in the information technology sector, businesses have gotten confused as to how costs for IT can be allocated in their books.... Reallocation of costs in Information Technology Reallocation of costs in Information Technology Introduction With the rapid technological advances in the information technology sector, businesses have gotten confused as to how costs for IT can be allocated in their books....
3 Pages (750 words) Research Paper

General Electrics Allocation of Costs

General Electric's Allocation of Costs Introduction Cost allocation is the most important task in any organization, as this task ensures that all the relevant heads get the relevant budgets for a proper allocation of resources.... General Electric and Cost Allocations At General Electric's managers are very much concerned about the Allocation of Costs as these allocations are required for the proper delegation of resources and cost to the respective department....
5 Pages (1250 words) Essay

Business Management Techniques

A writer of the paper "Business Management Techniques" reports that the method of costing do allocates costs based on a single volume measure that is direct labor hours and machine hours hence the method does not meet accuracy standards in an Allocation of Costs.... Hence this activity helps in eliminating Allocation of Costs that are irrelevant to the product.... Hence this activity helps in eliminating Allocation of Costs that are irrelevant to the product....
4 Pages (1000 words) Assignment

IKEA Service Blueprint

Then the activity costs are allocated to the products and services.... Because it entails the visualization of service forecasting.... This concept shows the quality of service and customer service delivery expected.... The service processes are evaluated in order to… The customer welfare is emphasized in order to retain customers in the furniture store....
4 Pages (1000 words) Research Paper

Rationale for workers compensation

Another objective is Allocation of Costs whereby cost allocation is spread cost of workers' compensation appropriately and proportionately ranging from the most to the least hazardous.... The rationale for workers compensation has two aspects in it, one being fairness to injured employees and the other being reduction of costs associated with workplace injuries.... The theory underlying in this is that employers will invest in accident- prevention programs to hold down compensation costs....
1 Pages (250 words) Essay

Reference Models

In a large enterprise, tracking the use of these resources helps in the effective Allocation of Costs as per the departments.... A sound reference model in an enterprise network management system is vital.... First, the reference model will help in fault… This will ensure minimum or no interruption of network services in an enterprise....
1 Pages (250 words) Essay

Advantages and Disadvantages of Job Order Costing System

Under and over-Allocation of Costs may also occur through this system due to the Allocation of Costs (Ahmed).... manufacturing company holds different departments that need an effective Allocation of Costs to ensure that the costing is accurate and all costs prove accounted for in the system.... The ability to track costs as they happen provides a real-time account of the costs that the company incur in their operations....
1 Pages (250 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us