PracQuiz_SpportJoint.BraulioF

docx

School

Los Angeles Mission College *

*We aren’t endorsed by this school

Course

001

Subject

Industrial Engineering

Date

Jan 9, 2024

Type

docx

Pages

2

Uploaded by MagistrateOwl613

Report
Support Department and Joint Cost Allocation Practice Quiz Support Department Cost Allocation Johnson Company produced chemical products. Janitorial and maintenance support department costs are allocated to the mixing and blending production departments based on square footage (janitorial) and machine hours (maintenance), respectively. Relevant department data is as follows: Janitorial Maintenance Mixing Blending Department Cost $18,000 $12,000 $52,000 $63,000 Square footage 1,000 3,000 Machine Hours 500 1,000 1. Using the direct method of support department cost allocation, determine the total cost of the Mixing and Blending departments after allocating all support costs to the production departments. 2. Why are the support department costs allocated to the production departments? What is the relationship of this portion of the chapter to the last chapter? 3. Provide an example of a support department and how its costs might be allocated. Try to identify an example that has not already been given by another student. Joint Cost Allocation Anderson Company makes three types of paint products: base, primer and paint. All products go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer is two times longer than for base, and the mixing process for paint is three times longer than for base. 1. Allocate the joint cost of production of $10,000 to each product using the weighted average method. 2. Assuming the market price at the split of point for base is $3 per gallon, primer is $4 per gallon and paint is $8 per gallon, use the market value at split-off to allocate the $10,000 of joint production costs. 3. Analyze the differences in the methods used in #1 and #2 above. What are the reasons for the difference? When would each method be most appropriate to use? Give an example of two products which might use each method above.
1- When products are split off, there is a difference in the ratio of mixing process time to market price. There is thus diversity. 2- Market Price Method is the most suitable to employ if you want to sell at the break off. However, the Weighted Average Method should be used if you do not want to sell at split off. Mixing Blending Total Department Cost ( A ) 52,000 63,000 115,000 Square Footage 1,000 3,000 4,000 Machine Hours 500 1,000 1,500 Support Dept Cost Allocation Janitorial 4,500 13,500 18,000 Maintenance 4,000 8,000 12,000 Total ( B ) 8,500 21,500 30,000 Total Cost ( A + B ) 60,500 84,500 145,000
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help