Allocating Support Department Costs Methods Homework Help Assures Improved Grades! Show There are various firms whose focus is not towards manufacture and outcome of any end products. Few of the sections on this perspective are for services like health clinics, cafeterias, productive support units and even janitorial services. All of these follow allocation services. Still, there are certain factors like dual and single rate methodologies which remain unclear for most students. So, we have designed allocating support department costs using the single-rate and dual-rate methods homework help manual. A brief insight We are already aware of the numerous business organizations that are existent in our society. And this is the reason of various corporations using either dual rate methodology or single rate methodology to operate with allocating support department costs. There is no doubt regarding various support departments who use cost accounting methods in order to distribute costs. In our allocating support department costs using the single-rate and dual-rate methods assignment help manual more details on this subject with ample examples. Explaining single rate method Allocation ofa single rate or price can be achieved from cost pool. Its distribution takes place in different support departments where they utilize the amount at a similar rate. This price is on per unit and takes on a base of single allocation. In simple words, single rate method expresses a certain methodology which does not involve in separation of variable cost and fixed cost. Dual rate method It is another of the methods with which allocating support department costs is attainable. It distributes variable costs and fixed costs with various base rates (cost allocation). This methodology does make a differentiation between variable cost and fixed costs. Support department uses this method by using actual usage and budgeted usage in various ways. Achievement of allocation As highlighted above, there are 2 approaches for allocating support department costs; management of it is via the utilization of:
There are more of such details related to allocating support department costs which you can learn more from our allocating support department costs using the single-rate and dual-rate methods homework help service. Benefits of using dual method over single method Amongst the many, there are 2 major benefits.
Reasons for choosing myhomeworkhelp.com Our allocating support department costs using the single-rate and dual-rate methods assignment help service has helped many students like you who face difficulty in obtaining topic details. Apart from the authentic details, we also offer you: Simple explanation with real life examples
With our allocating support department costs using the single-rate and dual-rate methods homework help service we assure you that you topic concept will be clear. And with this, you can definitely achieve the grades that you have always wished for yourself. In cost accounting, the dual rate cost allocation method categorizes cost into two types of cost pools: fixed costs and variable costs. You calculate a different cost allocation rate for each cost pool. A more specific review of costs leads to more precise cost allocations. Say you manage an online
tutoring business. Your instructors serve two markets — high school students and adult continuing education students — so your firm has a high school division and an adult ed division. Both company departments use technology in a big way. Your computer department (called information technology, or IT) installs software, trains staff, backs up data, and repairs computers. Assume your IT department with a budgeted fixed cost allocation rate of $625 per unit. Here’s a two-step
process to calculate the dual rate cost allocation of the IT department: Multiply the budgeted fixed cost allocation rate by the budgeted usage Multiply the budgeted variable cost allocation rate by the actual usage Note that the cost allocation rates are multiplied by different usage amounts. Here’s a way to keep the difference straight: It’s possible that your budgeted fixed cost come in as planned. In fact, your fixed cost may involve a
contract (lease agreement, insurance premiums) that cannot change after budgeting. That’s a way of remembering that you use budgeted usage for fixed cost allocations. Variable costs are harder to pin down in planning, so you use actual usage for the variable cost allocations. The first table shows the total budgeted fixed cost for the IT department. Dual Rate Allocation — Total Budgeted Fixed Cost
The next step for a dual rate calculation is to compute the variable costs. Using the IT department example, you see the related info in the second table. Dual Rate Allocation — Total Variable Cost
Using the dual rate method of allocation, the total IT department cost allocated to the high school division would be High school division IT department cost allocation = fixed costs + variable costs High school division IT department cost allocation = $937,500 + $260,000 High school division IT department cost allocation = $1,197,500 The adult education division’s cost allocation is $1,422,500 ($1,062,500 fixed cost + $360,000 variable cost). If you add the two allocations, you get $2,620,000, the total IT department allocation. Consider why the dual rate cost allocation total is different. It’s because the fixed portion of the allocation is based on budgeted information only. The fixed cost rate and usage are both budgeted amounts. You calculate variable costs as budgeted variable cost rate x actual hours of usage. The dual rate method allocates your costs more precisely than the single rate process. That’s because the dual rate method separates the analysis of fixed and variable costs. A more precise allocation means that your full product cost is more accurate. About This ArticleThis article is from the book:
About the book author:Kenneth W. Boyd has 30 years of experience in accounting and financial services. He is a four-time Dummies book author, a blogger, and a video host on accounting and finance topics. This article can be found in the category:
What is the difference between single and dual rate allocations?The main difference between the single rate and dual rate method is that the single rate method allocates the rate per unit of cost allocation for both variable and fixed cost.
What is the single rate allocation method?In cost accounting, the single rate cost allocation method uses one cost rate to dictate the dollars that are allocated from a cost pool to a unit, batch, department, or division. In the case of support departments, the rate allocates dollars to another department or division.
What is dual rate method of costThe dual-rate (cost-allocation) method classifies costs in each cost pool into two pools—a variable-cost pool and a fixed-cost pool—with each pool using a different cost-allocation base.
What is dual allocation method?A more precise allocation means that your full product cost is more accurate.</p>","description":"<p>In cost accounting, the <i>dual rate cost allocation method</i> categorizes cost into two types of cost pools: fixed costs and variable costs. You calculate a different cost allocation rate for each cost pool.
|
Single rate and dual rate methods used in allocating service department costs
zusammenhängende Posts
Urheberrechte © © 2024 nguoilontuoi Inc.
