文档介绍：LECTURE 9 – COST ALLOCATION ISSUES
LECTURE EXAMPLE 1 – SERVICE DEPARTMENT ALLOCATION
A firm has two products, one manufactured entirely in Department X, the other in Department Y. The firm has two service departments: A (material-handling) and B (a power-generating). An analysis of the work done by Departments A and B in a typical period follows. Each work unit for Department A represents a direct-labour hour of material handling time. Each work unit for Department B represents a kilowatt-hour of power.
USER
SOURCE A B X Y
Material handling (Dept A) 0 40 100 60 = 200 units (DL hours)
Power (Dept B) 150 0 30 120 = 300 units (kw hours)
The budgeted costs of the service departments during this typical period are $10,000 for A and $4,000 for B. For the step-down method, allocate from B first. Budgeted production department costs for the period:
X
Y
DM
DL
F OH
V OH
OH base
20,000
11,000
7,000
5,000
10,000 machine hours
22,000
13,000
9,000
7,500
15,000 DL hours
LECTURE EXAMPLE 2 – JOINT COST ALLOCATION
A firm incurs DM, DL and OH costs totalling $240,000 in process 1 to produce the following three beverages from that process:
Apple Juice Sold immediately it emerges from Process 1 without further processing for $.70 litre
Apple Cider Processed further in Process 2 - additional cost $.66667 litre. Sold for $ litre
Apple Pulp Processed further in P