Class Notes (837,621)
United States (325,118)
BUS 202 (26)
Nick Ross (26)
Lecture 8

# BUS 202 Lecture 8: February 8th Premium

6 Pages
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Department
Course
BUS 202
Professor
Nick Ross
Semester
Spring

Description
February 8th Wednesday, February 8, 2017 9:13 AM Audio 1 • Process costing: ○ Raw material -> Department A- > Department B- > Department C- > Sold § Departments known as operating departments § HR, Legal, Custodial (service Departments) □ Serve operating departments □ How do we get these service departments costs into the operating departments? ® Take money being occurred from (HR, Legal, Custodial) and add them to each Department A -> Department B- > Department C □ How to allocate costs: ® Direct method ◊ Allocates cost directly to the operating departments ® Step down • Service department break down: ○ Ex: (green = service) (orange = operating) Human Resources (HR) Custodial Lab Care Total Costs \$360,000 \$90,000 \$216,000 \$689,000 \$1,400,000 § Employee hours 12,000 6,000 18,000 30,000 66,000 Space (sq/feet) 10,000 200 5,000 45,000 60200 § HR □ Allocated based on employee hours Custodial: § □ Allocated based on sq feet § Direct: ------ HR Custodial Labs Care Costs \$360,000 \$90,000 \$261,000 \$689,000 Hr cost (\$360,00 (18,000 Hr/(18,000 Hr + (30,000Hr/(30,000Hr+ for labs 0) 30,000 Hr) = 18,000Hr)) = and care (0.375 * \$360,000) = (0.625 * \$360,000) = \$135,000.0 \$225,000.0 □ Custodial (\$90,000) (5,000sqft/(5,000sqft + (45,000sqft /(45,000sqft + cost 45,000sqft)) = 5,000sqft) = (0.9 * \$90,000) = Stepdown for labs (0.1 * \$90,000) = \$81,000.00 Method and care \$9,000.00 February 8th Wednesday, February 8, 2017 9:13 AM Audio 1 • Process costing: ○ Raw material -> Department A- > Department B- > Department C- > Sold § Departments known as operating departments § HR, Legal, Custodial (service Departments) □ Serve operating departments □ How do we get these service departments costs into the operating departments? ® Take money being occurred from (HR, Legal, Custodial) and add them to each Department A -> Department B- > Department C □ How to allocate costs: ® Direct method ◊ Allocates cost directly to the operating departments ® Step down • Service department break down: ○ Ex: (green = service) (orange = operating) Human Resources (HR) Custodial Lab Care Total Costs \$360,000 \$90,000 \$216,000 \$689,000 \$1,400,000 § Employee hours 12,000 6,000 18,000 30,000 66,000 Space (sq/feet) 10,000 200 5,000 45,000 60200 § HR □ Allocated based on employee hours Custodial: § □ Allocated based on sq feet § Direct: ------ HR Custodial Labs Care Costs \$360,000 \$90,000 \$261,000 \$689,000 Hr cost (\$360,00 (18,000 Hr/(18,000 Hr + (30,000Hr/(30,000Hr+ for labs 0) 30,000 Hr) = 18,000Hr)) = and care (0.375 * \$360,000) = (0.625 * \$360,000) = \$135,000.0 \$225,000.0 □ Custodial (\$90,000) (5,000sqft/(5,000sqft + (45,000sqft /(45,000sqft + cost 45,000sqft)) = 5,000sqft) = (0.9 * \$90,000) = Stepdown for labs (0.1 * \$90,000) = \$81,000.00 Method and care \$9,000.00 and care (0.375 * \$360,000) = (0.625 * \$360,000) = \$135,000.0 \$225,000.0 □ Custodial (\$90,000) (5,000sqft/(5,000sqft + (45,000sqft /(45,000sqft + cost 45,000sqft)) = 5,000sqft) = (0.9 * \$90,000) = Stepdown for labs (0.1 * \$90,000) = \$81,000.00 Method and care \$9,000.00 Total: \$261,000 + \$135,000.0 + \$689,000 + \$225,000.0 + \$9,000.00 = \$405,000.00 \$81,000.00 = \$995,000.00 Stepdown: Problem will tell which order to do things (HR first) § ------ HR Custodial Labs Care Costs \$360,000 \$90,000 \$261,000 \$689,000 HR (\$360,000) (6,000/(6,000+ (18,000/ (6,000 + (30,000/(6,000 + Stepdown 18,000+30,000)) = 18,000 +30,000)) = 18,000 + 30,000) = (0.1111 *\$360,000) = (0.3333*\$360,000) (0.5556 * \$360,000) \$39,996.0 = \$119,988.0 = \$200,016.0 Custodial (\$90,000 + \$39,996.0 (5,000sqft/(5,000sq (45,000sqft □ Stepdown = \$129,996.00 ) ft + 45,000sqft)) = /(45,000sqft + (0.1 * 5,000sqft) = (0.9 * \$129,996.00)= \$129,996.00) = \$12,999.6 \$116,996.4 Total: \$261,000 + \$689,000 + \$119,988.0 + \$200,016.0 + \$12,999.6 = \$116,996.4 = \$393,987.6 \$1,006,000 ○ Ex: (food Co-Op) ------ Admin Custodial Groceries Coffee Shop Total Costs \$200,000 \$60,000 \$3,860 \$340,000 \$4,460,000 § Hours 480 320 2,720 160 Space (SqFt) 800 1,200 9,500 500 □ Admin -> Employee Hours □ Custodial -> Space § Direct Method: ------ Admin Custodial Groceries Coffee Shop Costs \$200,00 \$60,000 \$3,860 \$340,000 0 Admin (\$200,0 (2,720/(2,720 + 160)) = (160/(160+ Direct 00) (0.9444 * \$200,000) = 2,720)= (0.0556 * and care (0.375 * \$360,000) = (0.62
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