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

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Problem 1Q

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Presented below are certain operating data for the four departments of Tally Manufacturing Company. Service Production 1 2 1 2 Total manufacturing overhead costs either identifiable with or allocated to each department $72,000 $86,400 $108,000 $117,600 Square feet of factory floor space 48,000 96,000 Number of factory workers 110 70 Planned direct labor hours for the year 24,000 36,000 Allocate, to the two production departments, the costs of service departments 1 and 2, using factory floor space and number of workers, respectively, as bases. Do not round bases when calculating reallocations of service departments. Production 1 2 Identifiable and allocated overhead Answer Answer Reallocation of service departments: Dept. 1 Factory floor space Answer Answer Dept. 2 Number of factory workers Answer Answer Total manufacturing overhead Answer Answer What is the apparent…
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Base Salaries $ 30,000 Number of employees Depreciation 20,000 Cost of goods sold Advertising 40,000 Percentage of total sales Department Number of employees Sales Cost of goods sold Drilling 1,000 $ 325,000 $ 75,000 Grinding 1,500 475,000 125,000 Total 2,500 $ 800,000 $ 200,000 The amount of salaries that should be allocated to Grinding for the current period is:
A sada manufacturer has two operating departments. Miong and Botting Mixing has 600 employees and Botting has 400 employees. Office costs of $320,000 are allocated to operating departments based number of employees. The office costs allocated to the Botting department are Murple Choice O O O $90,000 $64,000 $200,000 $192.000
Estimated cost and operating data for four companies for the upcoming year is as follow: Description Company X Company Y Company Z Company A Direct labor hours 80,000 45,000 60,000 45,000 Machine hours 30,000 70,000 21,000 28,500 Direct material cost $400,000 $290,000 $300,000 $265,000 Manufacturing overhead cost $536,000 $315,000 $480,000 $380,000 Predetermined overhead rates are computed using the following allocation bases in the four companies: Company Allocation Base X Direct labor hours Y Machine hours Z Direct material cost A 105% of DM cost Required: Compute each company’s predetermined overhead rate.
Criselda Company has provided detail on a variety of costs for Q4: Factory supplies: $9,100 • Administrative salaries: $97,500 • Direct materials: $153,500 • Sales staff salaries: $93,500 • Factory depreciation: $48,700 • Corporate headquarters building rent: $48,500 Indirect labor: $39,500 ● • Marketing: $103,000 Direct labor: $95,400 • Factory utilities: $24,100 The total of the period costs listed above for Q4 is: Answer: 342500
Direct costs Square footage Number of employees A Maintenance $126,000 800 $36,000 $42,750 Haman Resources $64,000 400 12 Q Zoom Mixing Finishing $105,000 $175,000 1,200 1,600 24 32 Lola Corporation consist of two service departments, Maintenance and Human Resources. John Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The following information has been gathered for the current year: If the step-down method is used to allocate service department costs, and the Maintenance Department is allocated first, the amount of costs allocated from the Maintenance Department to the Mixing Department is B $63,000 $42,000
Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows:Indirect labor $507,000Cutting Department 156,000Finishing Department192,000 ________Total $855,000 _______ The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:Activity Budgeted Activity Cost Activity BaseProduction control $237,000 Number of production runsMaterials handling 270,000 Number of moves ________Total $507,000 ________ ________The activity-base usage quantities and units produced for the two products follow:Instructions1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is…
Quillen Company manufactures a product in a factory that has two production departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Direct costs Normal activity: Number of employees Maintenance hours Required: 1 2 Support Departments S1 S2 Cutting $180 000 $150 000 $122 000 1 200 Production Departments 30 63 16 000 Sewing $90 500 147 4 000 Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratios - one for Cutting and the other for Sewing.) Allocate the support department costs to the production departments by using the direct method.
$516,301 $1,770,842. $571,709 $943,699. $888,291 6
Pronghorn Industries operates two support departments, Personnel and Accounting, and two producing departments, Fabrication and Assembly. Information on the support percentages and cost for each department is as follows: Personnel Personnel Accounting 10% Fabrication Assembly O $14357. $13700. $13097. $14436. 0% 30% 60% Accounting 6% 0% 55% 39% Operating Costs $17400 7400 104500 98500 Using the reciprocal method of allocating support costs, what is the total cost allocated to the Assembly Department from the two support departments?

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