Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $25,000,000 a year. You have the following selected information about the two divisions: Northern Southern Fixed Variable Total Number of Employees 2,915 2,385 Required: Determine the cost allocation if $15.0 million of the HR costs are fixed and allocated on the basis of employees, and the remaining costs, which are variable, are allocated on the basis of the wage and salary expense total. Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. $ Northern Wage and Salary Expense ($000) $ 241,800 148, 200 0 $ Southern 0

Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $25,000,000 a year. You have the following selected information about the two divisions: Northern Southern Fixed Variable Total Number of Employees 2,915 2,385 Required: Determine the cost allocation if $15.0 million of the HR costs are fixed and allocated on the basis of employees, and the remaining costs, which are variable, are allocated on the basis of the wage and salary expense total. Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. $ Northern Wage and Salary Expense ($000) $ 241,800 148, 200 0 $ Southern 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows: Division 1: Sales: Expenses: Asset investment: $200,000 $150,000 $1,000,000 Division 2: Sales: $45,000 Expenses: $35,000 Asset investment: $200,000 Conner currently requires investments to meet a rate of return on asset investment of 5%. Which division has the greatest level of "residual income"? Select one: O a. Division 1 O b. Division 2 O c. Both divisions have the same return on investment ratio
Calculate division margins in percentage terms prior to allocating fixed overhead costs.
Franklin Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected Costs Direct labor Direct materials Fringe Benefits: Home 1 2 3 Total Indirect Materials: Assume Franklin needs to allocate two major overhead costs ($67,200 of employee fringe benefits and $18,080 of Indirect materials costs) among the three jobs. Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. Note: Round "Allocation rate" to 2 decimal places. Home 1 2 3 Total Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 $ 61,000 107,000 The cost components to determine the total cost of each house: Home 1 Home 2 Allocation Rate x Weight of Base = Allocated Cost X $ 0 0 0 $ Home 2 $ 101,000 148,000 X X Allocation Rate x Weight of Base 0 X $ 0 = = = Home 3 $ 174,000 197,000 = = $ = Allocated Cost $ 0 0 $ $ 0…
Fans Company has two service departments-product design and engineering support, and two production departments-assembly and finishing. The distribution of each service department's efforts to the other departments is shown below: SERVICE DEPARTMENT Product Design Engineering Support The direct operating costs of the departments (including both variable and fixed costs) were as follows: Product Design Engineering Support Assembly Finishing Multiple Choice $631,492 Design 0% 20% $1,018.633. SERVICES PROVIDED TO $ 162,000 $ 142,000 $ 552,000 $ 842,000 Support 10% 0% The total cost accumulated in the assembly department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar. Assume that the engineering support department goes first): Assembly 30% 45% Finishing. 60% 35%
A
The materials used by Hibiscus Company Division A are currently purchased from outside supplier at $53 per unit. Division B is able to supply Division A with 12,400 units at a variable cost of $47 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 12,400 units. (a) By how much will each division's income increase as a result of this transfer? Enter an increase as a positive number and a decrease as a negative number. Division A $fill in the blank 1 Division B $fill in the blank 2 (b) What is the total increase in income for Hibiscus Company? $fill in the blank 3
The following is a system of simultaneous linear equations to allocate costs using the reciprocal method. Matrix algebra is not required. The following costs were incurred in three operating departments and three service departments in Westmoreland Company. Department Direct Costs Label Subassemblies $570,000 P1 Final assembly 795,000 P2 Marketing Building occupancy 305,000 P3 105,000 S1 Research & development 140,000 S2 Supervision 65,000 S3 Use of services by other departments is as follows. User Departments Sub- Final Building Service Cost Center assemblies Assembly Marketing Оссирancy R&D Supervision Building occupancy 0.30 0.20 0.20 0.15 0.15 R&D 0.50 0.50 --- --- Supervision 0.20 0.30 0.20 0.20 0.10 The equation for department P3 (marketing) is: Multiple Choice P3 = $305,000 + 0.50S1 + 0.50S3. P3 = $305,000 + 0.20S1 + 0.70S2 + 0.20S3. P3 = $305,000 + 0.20S1 + 0.20S2 + 0.70S3. P3 = $305,000 + 0.20S1 + 0.20S3.
Objective: Consider that you are an analyst at Regeneron Pharmaceuticals. You need to decide how to allocate administrative overhead costs to Regeneron's main commercial products (Eylea, Dupixent, Kevzara and Praluent). Determine how to appropriately allocate the costs in the table below to each of the commercial products using an allocation methodology of your choice. Department2019 Annual Operating ExpenseTime spent supporting Commercial productsCommercial$200MM100%IT$100MM25%Facilities$150MM0%Finance$25MM20%Human Resources$75MM10% Use the supporting document Net Product Sales of REGN Products to facilitate your analysis. Provide a written summary of how you allocated the overhead costs to each product in an outline of no more than one page. As a starting point, it's recommended that you revisit the material we covered in Chapter 12. Guidance on calculations:Start off with Net Product Sales of REGN Products. Your objective pertains to 2019 expenses, so you should be reviewing 2019…
Here is the question: The following transactions are July activities of Bennett’s Bowling, Inc., which operates several bowling centers, offering customers lanes for games and merchandise for sale. Bennett’s collected $15,000 from customers for games played in July. Bennett’s sold bowling merchandise inventory from its pro shop for $800; received $300 in cash and customers owed the rest on account. (Consider only the effect on revenue here.) Bennett’s received $400 from customers who purchased merchandise in June on the account. The men’s and ladies’ bowling leagues gave Bennett’s a deposit of $2,500 for the upcoming fall season. If revenue is not recognized in July, choose 'None' for the account affected. If revenue is to be recognized in July, indicate the revenue account title and amount. Please see attach for my answer. I got a, c and d wrong. I now understand question a should be Games Revenue and c is None (not recognized in July) but I dont undrestand why d is wrong. Thanks
o Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision r several of the parts that it currently produces. Cost information for one such machine part is given below: Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 units) $ 31.50 5,440.00 6,760.00 $ 55.90 fty percent of the fixed manufacturing costs are directly traceable to this specific machine part and therefore avoidable. An outside upplier will sell the part at a price of $44 per unit if 500 units are purchased. equired: repare an analysis whether We Make should continue to manufacture this machine part or whether it should purchase it from the utside supplier. (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) Purchase ariable cost ixed manufacturing overhead Common costs otal costs hould the company make or buy? O Make ○ Buy 500 Units Per Unit Make…
Barrington Box Enterprises has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,800,000. You have been provided with the following information for the upcoming year: Large Small Calls 150,000 90,000 The cost accountant determined $2,760,000 of the communication network's costs were fixed and should be allocated based on the number of calls. The remaining costs should be allocated based on the time on the network. What is the total communication network costs allocated to the Large Box Division, assuming the company uses dual-rates to allocate common costs? Multiple Choice $2,760,000 $2,259,000 $2,541,000 Time on Network (hours) 160,000 240,000 $1,640,000