Arbon Company has three service departments and two operating departments. Selected data concerning the five departments arepresented below:CostsNumber of employeesSquare metres of space occupiedMachine-hoursService DepartmentsOperating DepartmentsAdministrative$84,00080300Janitorial$67,800601, 200EquipmentMaintenance$36,000240PrepFinishing$256, 100 $498, 6006003001,0002,0007,000Total$942, 5001,28011, 50010,00030,00040,000The company allocates service department costs by the step-down method in the following order: Administrative (number ofemployees), Janitorial (space occupied), and Equipment Maintenance (machine-hours).Required:Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, how muchoverhead cost would be assigned to each operating department? (Negative amounts should be indicated by a minus sign.)Departmental costs before allocationsAllocations:AdministrativeJanitorialEquipment maintenanceTotal costs after allocation.Service DepartmentsAdministrative JanitorialEquipmentMaintenanceOperating DepartmentsPrepFinishingTotal

Step 1:DepartmentCostNumber of EmployeesSpace Occupied (sq…

Answered: Arbon Company has three service…

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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Sierra Company has two operating departments: Mixing and Bottling. Mixing occupies 26,940 square feet. Bottling occupies 17,960 square feet. Maintenance costs of $210,000 are allocated to operating departments based on square feet occupied. Determine the maintenance costs allocated to each operating department. Department Square Feet Mixing Bottling Total 0 Percent of Total % % 88 0.00 % Allocated Amount $ 0
Compton Information Services, Inc., has two service departments: human resources and billing. Compton's operating departmen organized according to the special industry each department serves, are health care, retail, and legal services. The billing depart supports only the three operating departments, but the human resources department supports all operating departments and th billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Department Billing Human Resources 10 $720,000 $1,428,000 $6,000,000 Billing Health Care Retail Complete this question by entering your answers in the tabs below. Req A2 Legal Services Total *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Compton adopts the step method. The company the number of employees as the base for allocating human resources department costs and department annual revenue as…
The following departmental information is for the four departments at Samoa Industries. Departmental Total Cost Cost Driver Square Feet Number of Employees Janitorial $150,000 Square footage serviced 200 40 Cafeteria 50,000 Number of employees 20,000 12 Cutting 1,125,000 4,000 120 Assembly 1,100,000 16,000 40 The Janitorial and Cafeteria departments are support departments. Samoa uses the sequential method to allocate support department costs, first allocating the costs from the Janitorial Department to the Cafeteria, Cutting, and Assembly departments. Question Content Area 1. Determine the dollar amount of the Janitorial Department costs to be allocated to the (a) Cafeteria, (b) Cutting, and (c) Assembly departments. Department Amount a. Cafeteria Department fill in the blank 1 of 3$ b. Cutting Department fill in the blank 2 of 3$ c. Assembly Department fill in the blank 3 of 3$…
Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Costs Personnel Legal Complete this question by entering your answers in the tabs below. Total Personnel $ Personnel $ 10,800 $ 320,000 Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. 320,000 $ 320,000 $ Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the reciprocal method. Note: Do not round intermediate calculations. Round your final answers…
Dog's Company provides the following ABC costing information: Activities Total Costs Activity - cost drivers Labor $320,000 8,000 hours Gas $36, 000 6,000 gallons Invoices $ 40,000 2,500 invoices Total costs $396,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,200 hours 4, 300 hours Gas 1,700 gallons 800 gallons 3,500 gallons Invoices 1,600 invoices 400 invoices 500 invoices How much of the total costs will be assigned to the Lawn Department? Group of answer choices $134,500 $134, 600 $135,800 $135, 600
Company has two production departments; Cutting and Painting, and two service departments Maintenance and design which directly support two production departments. The first level overhead costs of these departments are as follows. Cutting Painting $400,000 Design 640,000 Maintenance 96,000 500,000 The following schedule reflects the use of the Maintenance and Design Departments' output by other departments: Maintenance Maintenance (hours) Design (minutes) 240,000 0 Design 1,000 0 Cutting 1,000 his 840,000 Painting 8,000 120,000 Required 1. Allocate service departments cost to production departments by using direct method and step-down method.
Departmental information for the four departments at Samoa Industries is provided below. Total Cost Cost Driver Square Feet Number of Employees Janitorial $150,000 Square footage serviced 200 40 Cafeteria 50,000 Number of employees 20,000 12 Cutting 1,125,000 4,000 120 Assembly 1,100,000 16,000 40 The Janitorial and Cafeteria departments are support departments. Determine the dollar amount of the Janitorial Department costs to be allocated to the (a) Cutting and (b) Assembly departments using the direct method. a. Cutting Department b. Assembly Department
! Required information The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Costs Number of employees Square feet of space occupied Hours of press time Departmental costs before allocations Allocations: Service Departments Administration Janitorial Maintenance $ 154,000 $ 115,500 $ 52,800 140 20,000 Administration costs Janitorial costs Maintenance costs Total costs after allocations The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). $ 60 15,000 Required: Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations.) Service…
Compton Information Services, Inc., has two service departments: human resources and billing. Compton's operating departmen organized according to the special industry each department serves, are health care, retail, and legal services. The billing depart supports only the three operating departments, but the human resources department supports all operating departments and th billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Billing Human Resources 10 $720,000 $1,428,000 $6,000,000 Department Req A2 Health Care Retail Legal Services Total Complete this question by entering your answers in the tabs below. Req B1 *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Compton adopts the step method. The company the number of employees as the base for allocating human resources department costs and department annual revenue as…
Barstow Manufacturing 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: FROM TO Design Support Assembly Finishing Design 0 % 20 % 10 % 70 % Support 10 % 0 % 30 % 60 % The direct operating costs of the departments (including both variable and fixed costs) were as follows: Design $ 110,000 Engineering Support $ 490,000 Assembly $ 440,000 Finishing $ 700,000 The total cost accumulated in the assembly department using the reciprocal 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): Multiple Choice $2,009,592. $557,551. $612,959. $1,182,449. $1,127,041.
Premium Company provides the following ABC costing information: Activities Costs Account inquiry $200,000 Account billing $140,000 Activity-cost drivers 25,000 Account verification accounts $75,000 Total costs 4,000,000 lines Correspondence letters 10,000 hours 40,000 accounts Account billing lines 250,000 lines Department B Account inquiry hours hours Select one: 4,000 letters The above activities are used by Departments A and B as follows: 4,000 hours Account verification accounts accounts 8,000 accounts Correspondence letters a. $8,750 b. $8,500 c. $8,250 d. $8,540 Total 1,600 letters $440,000 Department 2,500 10,000 400,000 lines letters How much of the account billing cost will be assigned to Department B 1,200
ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made Accounting 500,000 number of invoices processed Personnel 400,000 number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 The support department cost that will be allocated to the Macro Division is a.$175,000 b.$130,000 c.$305,000 d.$405,000

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