colorscope - Cost Allocation System Two stage cost...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Cost Allocation System Two stage cost allocation system should be used at colorscope – 1. Overhead costs should be assigned to cost pools. Cost pools in this case are the production departments like Job preparation, scanning, assembly, output and QC. 2. In the 2 nd stage the overheads from pools are assigned to the individual jobs In the first stage, Rent will be calculated based on the floor space while the other costs will be assigned based on the labor hours. Exhibit 11 gives the overhead costs – Description Prep Scanning Assembly Output QC Idle Total Wages $8,000 $32,000 $64,000 $10,000 $11,000 0 $125,000 Depreciation $500 $25,000 $10,000 $14,000 $500 $50,000 Rent $2,000 $2,000 $8,000 $4,000 $1,000 $13,000 $30,000 Others $1,311 $5,246 $10,492 $1,639 $1,311 $19,999 Total Overhead $11,811 $64,246 $92,492 $29,639 $13,811 $13,000 $224,999 Labor Hour 160 640 1280 200 160 Overhead $74 $100 $72 $148 $86 Rate/labor hr Floor Space 1 000 1000 4000 2000 500 6500 15000 Now in the 2 nd stage,
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/24/2011 for the course FINANCE 123 taught by Professor Hbr during the Spring '11 term at Lethbridge College.

Page1 / 2

colorscope - Cost Allocation System Two stage cost...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online