GantAccounting performs two types of services, Audit and Tax. Gant's estimated overhead costs consist of computer support, $300,000;and legal support, $150,000. Information on the two services and their estimated use of cost drivers is as follows:Direct labor costCPU minutesLegal hours usedAuditA. $150,000.B. $180,000.C. $270,000.D. $300,000.$50,00040,000200Tax$100,00010,000800Overhead assigned to audit services using traditional costing using direct labor cost as the base is

and legal support, $150,000. Information on the two services and their estimated use of cost drivers is as follows: Tax $100,000 Direct labor cost CPU minutes Legal hours used Audit $50,000 40,000 A. $150,000. B. $180,000. C. $270,000. D. $300,000. 200 10,000 800 Overhead assigned to audit services using traditional costing using direct labor cost as the base is

and legal support, $150,000. Information on the two services and their estimated use of cost drivers is as follows: Tax $100,000 Direct labor cost CPU minutes Legal hours used Audit $50,000 40,000 A. $150,000. B. $180,000. C. $270,000. D. $300,000. 200 10,000 800 Overhead assigned to audit services using traditional costing using direct labor cost as the base is

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
Diaz and Associates incurred the following costs in completing a tax return for a large company. Diaz applies overhead at 50% of direct labor cost. Labor Hours Used Hourly Rate Partner 5 $500 Senior manager . 12 200 Staff accountants . 100 50 1. Prepare journal entries to record direct labor and the overhead applied. 2. Prepare the journal entry to record the cost of services provided. Assume the beginning Services in Process Inventory account has a zero balance.
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Diaz... (see picture for info).
Diaz and Associates incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 50% of direct labor cost Direct Labor on Tax Job Partner Senior manager Staff accountants Hours Used 4 14 110 Direct labor type 1. Determine the total cost of this tax services job. Estimated Cost Hours used Hourly rate Hourly Rate $ 470 190 60 Total direct labor cost Overhead Estimated Applied Overhead Total cost OH Base Labor Cont OH rate Total Cost 2. if Diaz charged $22,000 for this tax services Job, what is the gross profit for the job? Gross Profit
Subject :- Account
Diaz and Associates incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 50% of direct labor cost. (Please see picture for rest of info).
A manufacturing company has two service and two production departments. Human Resources and Machine Repair are the service departments. The production departments are Grinding and Polishing. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The human resources department services all departments of the company, and its costs are allocated using the numbers of employees within each department, while machine repair costs are allocable to Grinding and Polishing on the basis of machine 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.
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.
Job order cost accounting for a service company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 65% of media purchases. On August 1, the four advertising projects had the following accumulated costs: During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. Journalize the summary entry to record each of the following for the month: A. Direct labor costs B. Media purchases C. Overhead applied D. Completion of Vault Bank and Take Off Airlines campaigns
Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services Department (CCS) costs to profit centers. The following table lists the types of services and cost drivers for each service. The table also includes the budgeted cost and quantity for each service for August. One of the profit centers for Varney Corporation is the Communication Systems (COMM) division. Assume the following information for COMM: COMM has 2,500 employees, of whom 20% are office employees. All of the office employees have been issued a smartphone, and 95% of them have a computer on the network. One hundred percent of the employees with a computer also have an email account. The average number of help desk calls for August was 0.6 call per individual with a computer. There are 400 additional printers, servers, and peripherals on the network beyond the personal computers. a. Compute the service allocation rate for each of CCSs services for August. b. Compute the allocation of CCSs services to COMM for August.
Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and employs 15 professionals and eight staff. The firm does tax work for small businesses and well-to-do individuals. The following data are provided for the last fiscal year. (The Mason, Durant, and Westbrook fiscal year runs from July 1 through June 30.) Required: 1. Prepare a statement of cost of services sold. 2. Refer to the statement prepared in Requirement 1. What is the dominant cost? Will this always be true of service organizations? If not, provide an example of an exception. 3. Assuming that the average fee for processing a return is 850, prepare an income statement for Mason, Durant, and Westbrook. 4. Discuss three differences between services and tangible products. Calculate the average cost of preparing a tax return for last year. How do the differences between services and tangible products affect the ability of MDW to use the last years average cost of preparing a tax return in budgeting the cost of tax return services to be offered next year?