Lecture Fundamentals of cost accounting (4th edition): Chapter 11 - Lanen, Anderson, Maher

(BQ) Chapter 11 - Service department and joint cost allocation. We have seen how cost allocation is used to develop the costs of products, services, and customers. However, part of the indirect cost incurred is from departments that do not directly produce the product or service but rather provide service to the departments that do produce the product or provide the service. In this chapter we will allocate the costs of these “service” departments. We will also consider product costing when multiple products are produced from the same inputs in fixed proportions.
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Lecture Fundamentals of cost accounting (4th edition): Chapter 11 - Lanen, Anderson, Maher© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in anymanner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. ServiceDepartmentandJointCost Allocation Chapter11 PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPAMcGrawHill/Irwin Copyright©2014byTheMcGrawHillCompanies,Inc.Allrightsreserved.LearningObjectivesLOLO 11-1 11-1 Explain Explain why why service service costs costs are are allocated. allocated.LOLO 11-2 11-2 Allocate Allocate service service department department costs costs using using the the direct direct method. method.LOLO 11-3 11-3 Allocate Allocate service service department department costs costs using using the the step step method. method.LOLO 11-4 11-4 Allocate Allocate service service department department costs costs using using the the reciprocal reciprocal method. method.LOLO 11-5 11-5 Use Use the the reciprocal reciprocal method method forfor decisions. decisions.LOLO 11-6 11-6 Explain Explain why why joint joint costs costs are are allocated. allocated.LOLO 11-7 11-7 Allocate Allocate joint joint costs costs using using the the net net realizable realizable value value method. method.LOLO 11-8 11-8 Allocate Allocate joint joint costs costs using using the the physical physical quantities quantities method. method.LOLO 11-9 11-9 Explain Explain how how cost cost data data are are used used inin the the sell-or-process-further sell-or-process-further decision. decision.LOLO 11-10Account 11-10Account for for by-products. by-products.LOLO 11-11(Appendix) 11-11(Appendix) Use Use spreadsheets spreadsheets to to solve solve reciprocal reciprocal cost cost allocation allocation problems. problems. ...