Virgin River Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the numberof employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information isprovided in the following table. Using the sequential method of support department cost allocation, determine the total costsfrom Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each ofthe production departments.SupportDepartment 1 Department 2SupportProductionProductionDepartment 1 Department 2Number of employees9.72518Asset value$1,150$670$6,230$5,100Department cost$20,000$15,500$99,000$79,000

Name: Virgin River Inc. produces horse and rancher equipment. Costs from Su
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Description: Virgin River Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the numberof employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information isprovided in

In the sequential allocation method the cost of each service dept is allocated one department at a…

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Support Department 1 Department 2 Support Production Production Department 1 Department 2 Number of employees 7 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000

Support Department 1 Department 2 Support Production Production Department 1 Department 2 Number of employees 7 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2E

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