: Al Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cos of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using direct method. How much is the Assembling department total cost after cost allocation: Support Departments Operating Departments Admin R&D Manufacturing Assembling Total Cost Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13 Select one: O a. RO 155775 O b. 162090.3 O c. RO 143225 O d. RO 136909.7

: Al Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cos of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using direct method. How much is the Assembling department total cost after cost allocation: Support Departments Operating Departments Admin R&D Manufacturing Assembling Total Cost Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13 Select one: O a. RO 155775 O b. 162090.3 O c. RO 143225 O d. RO 136909.7

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...

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A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
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Larsen, Inc., produces two types of electronic parts and has provided the following data: There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plantwide rate? Which product is undercosted? 3. What if the machine hours were used for the plantwide rate? Would this remove the cost distortion of a plantwide rate?
Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detailed in the following table: Instructions 1. Assuming that Hooligan Adventure Supply uses the sequential method to allocate its support department costs, which support department does it most likely allocate first? 2. Based on your response in part (1), determine the total costs allocated from each support department to each production department using the sequential method. 3. If Hooligan Adventure Supply wanted to use a more accurate support department cost allocation method, which method should it choose? What might discourage the company from using this method?
AI Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cost of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using direct step-dowrtHow much is the Assembling department total cost after cost allocation: Support Departments Operating Departments Admin R&D Manufacturing Assembling Total Cost Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13 Select one: O a. RO 155775 O b. 162090.3 O c. RO 143225 O d. RO 136909.7
Valron Company has two support departments, Human Resources and GeneralFactory, and two producing departments, Fabricating and Assembly.The costs of the Human Resources Department are allocated on the basis of numberof employees, and the costs of General Factory are allocated on the basis of squarefootage. Valron Company uses the direct method of support department costallocation.Required:1. Calculate the allocation ratios for the four departments using the directmethod.2. Using the direct method, allocate the costs of the Human Resources andGeneral Factory departments to the Fabricating and Assembly departments.3. What if the General Factory Department had 40 employees? How would thataffect the allocation of Human Resources Department costs to the Fabricatingand Assembly departments?
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Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining. Order Filing, and Other-based on resource consumption, Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Activity: Product W1 Product Me Total Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Ms) and Order Filing costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Product W1 Product Me Total Activity Cost Pools MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text 5,530 17,000 22,530 Orders (Order Filling)…
(Appendix 4B) Direct Method of Support Department Cost Allocation Stevenson Company is divided into two operating divisions: Battery and Small Motors. The company allocates power and general factory costs to each operating division using the direct method. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. Support department cost allocations using the direct method are based on the following data: Operating Divisions Overhead costs Machine hours Square footage Direct labor hours Required: Battery Support Departments Small Motors Power $160,000 2,000 1,000 General Factory Battery $430,000 $163,000 2,000 8,000 Power 1,500 1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places, if necessary.) General Factory 0.8000 ✓ 0.2727 X 7,500 18,000 Small Motors $84,600 2,000 20,000 60,000 0.2000 X 0.7273 2. Allocate the support service costs to the…
Virgin River Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table. Using the sequential method of support department cost allocation, determine the total costs from Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 and to each of the production departments. Support Department 1 Department 2 Support Production Production Department 1 Department 2 Number of employees 9. 7 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000
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Rabia Company has two support departments, Human Resources and Maintenance, and two producing departments, Fabrication and Assembly The company only had mixed cost. Human Resource costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Predetermined overhead rates for fabrication and assembly are based on direct labor hours. Required: 1. Calculate the allocation ratios. 2. Using the direct method, allocate the costs of the Human Resources and Maintenance departments to the Fabrication and Assembly departments. Also write the final cost of both the production departments. 3. What if the Maintenance Department had 50 employees? How would that affect the allocation of Human Resources Department costs to the Fabrication and Assembly departments?