# Haden Company has four department, of which Assembly and Finishing are producing departments.

| November 9, 2018

department, of which Assembly and Finishing are producing departments.
Meanwhile, power and general factory are service (support) departments. The
following information pertains to the service (support) departments:

Services provided to:
Power General Factory Assembly Finishing
Direct
cost \$90,000 \$60,000 \$45,000 \$75,000

Power — 20% 30% 50%
General
Faculty 40% — 30% 30%

Required:
a) Determine the total amount of costs assigned
to the Assembly and Finishing Departments after you allocate the service
(support) department costs using the direct method (includes direct
costs).
b) Determine the total amount of costs assigned
to the Assembly and Finishing Departments after you allocate the service (support)
department costs using the step (sequential) method (includes direct
costs).
c) Give me the two
equations to measure the total amount of costs to be allocated from the two
support department using the reciprocal method.
d) Under the reciprocal
method, what is the total costs to be allocated from the Power Department?
e) Under the reciprocal
method, what is the total costs to be allocated from the General Factory
Department?

2. More Corporation
manufactures two products, X and Y, from a joint process. It costs Moors
\$600,000 in a joint process to produce 3,000 units of X and 2,000 units of Y.
Both products can be sold at the split-off point or they can be processed
further to completion. The company will incur separable costs of \$45 per units
for X and \$90 for Y to process further. X and Y can be sold for \$240 and \$300,
respectively, at completion.
Required:
a.
What is the amount of separable
costs assigned to products X and Y assuming that joint costs are
allocated using the net realizable value method?

b. What is the amount of Joint costs assigned to products
X and Y assuming that joint cost are allocated using the final sales value
method?

c.
What is the amount of total
costs assigned to products X and Y assuming that joint costs are
allocated using the physical unitâ€™s method?

d.
Should product X be sold at the split-off point or processed
further assuming that it can be sold for \$165 at split-off? Justify your answer
with numbers.

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