Assignment 3 - Hand-in Assignment 3 June 02, 2006 (ch...

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Hand-in Assignment 3 – June 02, 2006 (ch 14-15) Question 1(30 points) Krum Lawn Equipment has five departments, of which Casting and Finishing are producing departments. Maintenance, Product Movement, and Inspection are support departments. The distribution of the support departments is as follows: Support costs Mnt Prod Insp. Cast. Finish mvmt Maintenance $ 84,000 0% 5% 25% 50% 20% Product movement $160,000 10% 0% 5% 45% 40% Inspection $ 38,000 15% 5% 0% 20% 60% Required: Use the step-down method to allocate the support departments’ costs. Allocate the support department with the highest support costs first. Then allocate the support department with the next highest support costs. Prepare a schedule showing the total costs allocated to each department. Question 2 (20 poimts) Scarborough Sales, a real estate company specializing in apartment rentals and home sales, is having difficulty in gathering appropriate cost information for evaluating its operations. It owns several large apartment complexes and sells homes owned by
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Assignment 3 - Hand-in Assignment 3 June 02, 2006 (ch...

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