(a) TV assembler, (b) building contractor, (c) automobile repair shop, (d) paper manufacturer, (e) custom jewelry manufacturer? Discuss which of the three commonly used methods for allocating support department costs would or could be used and which of the four methods for allocating joint costs would or could be used in that business type and why. In the business type you selected, what is the most important implication improving operations in that business type?

Directions:

Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.

Your initial post should address all components of the question with a 600 word limit.

Allocation of support department costs and joint product costs requires practicing the different allocation methods to fully understand how they work.

Learning Outcomes

Explain methods for allocating support department costs to products.

Solve allocation of support department costs using different methods.

Examine joint product costs using different methods.

Readings

Required

Chapter 5 in Managerial Accounting

Borad, S. B. (2020, May 18). Cost Allocation – Meaning, Importance, Process and More. EFinanceManagement.com. https://efinancemanagement.com/costing-terms/cost-allocation (seminal)‌

Recommended:

Chapter 5 PowerPoint slides in Managerial Accounting

Cairney, T., & Sinclair, D. T. (2006). An Examination of Support Department Cost Allocations. The Journal of Cost Analysis & Management, 8(1), 37–54. https://doi.org/10.1080/15411656.2006.10462255