成本会计pp14.pptVIP

CHAPTER 14 Allocation of Support Department Costs, Common Costs, and Revenues Allocating Costs of a Supporting Department to Operating Departments Supporting (Service) Department – provides the services that assist other internal departments in the company Operating (Production) Department – directly adds value to a product or service Methods to Allocate Support Department Costs Single-Rate Method – allocates costs in each cost pool (service department) to cost objects (production departments) using the same rate per unit of a single allocation base No distinction is made between fixed and variable costs in this method Methods to Allocate Support Department Costs Dual-Rate Method – segregates costs within each cost pool into two segments: a variable-cost pool and a fixed-cost pool. Each pool uses a different cost-allocation base Allocation Method Tradeoffs Single-rate method is simple to implement, but treats fixed costs in a manner similar to variable costs Dual-rate method treats fixed and variable costs more realistically, but is more complex to implement Allocation Bases Under either method, allocation of support costs can be based on one of the three following scenarios: Budgeted overhead rate and budgeted hours Budgeted overhead rate and actual hours Actual overhead rate and actual hours Choosing between actual and budgeted rates: budgeted is known at the beginning of the period, while actual will not be known with certainty until the end of the period Methods of Allocating Support Costs to Production Departments Direct Step-Down Reciprocal Direct Method Allocates support costs only to Operating Departments The direct method does not allocate support department cost to other support departments Direct Method Step-Down Method Allocates support-department costs to other support departments and to operating departments in a sequential manner that partially recognizes the mutual services provided among all support departments A popular step-down sequence be