COST13-14Cost Allocation(成本管理会计-复旦, 洪剑鞘)模板.ppt

Budgeted versus Actual Usage Allocation Bases Organizations commit to infrastructure costs on the basis of a long-run planning horizon. The use of budgeted usage to allocate these fixed costs is consistent with the long-run horizon. Learning Objective 3 Allocating costs of support departments Allocating Support Departments Costs Organizations distinguish between operating departments and support departments. An operating department (a production department in manufacturing companies) adds value to a product or service. A support department (service department) provides the services that assist other operating and support departments in the organization. Allocating Support Departments Costs Three methods are widely used to allocate the costs of support departments to operating departments: Direct allocation method Step-down method Reciprocal method Allocating Support Departments Costs Direct method: Allocates support department costs to operating departments only. Step-down (sequential allocation) method: Allocates support department costs to other support departments and to operating departments. Allocating Support Departments Costs Reciprocal allocation method: Allocates costs by including the mutual services provided among all support departments. The direct method and the step-down method are less accurate than the reciprocal method when support departments provide services to one another reciprocally. Allocating Support Departments Costs The following information pertains to the Toledo Division of Sandy Corporation: Recall that the Toledo Division has two operating departments – Assembly and Finishing, and two support departments – Maintenance and Human Resources. Allocating Support Departments Costs Total square feet = 255,000 Total number of employees = 95 Maintenance is allocated using square feet. Human Resources is allocated using number of employees. Allocating Support Departments Costs Human Maint