Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Costs Number of employees Square metres of space occupied Machine-hours Service Departments Equipment Administrative Janitorial Maintenance Prep Finishing Total $36,000 $256,100 $498,600 $950,500 240 1,280 $67,800 $92,000 80 60 600 300 300 1,200 1,000 2,000 11,500 7,000 54,000 80,000 26,000 The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupied), and Equipment Maintenance (machine-hours). Departmental costs before allocations Allocations: Required: Using the step-down method, allocate the service department costs to the operating departments. (Negative amounts should be indicated by a minus sign.) Administrative Janitorial Maintenance Total costs after allocation Service Departments Administrative Janitorial Maintenance $ 0 $ Operating Departments 0 $ 0 $ Operating Departments Prep Finishing 0 $ 0 Total

Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Costs Number of employees Square metres of space occupied Machine-hours Service Departments Equipment Administrative Janitorial Maintenance Prep Finishing Total $36,000 $256,100 $498,600 $950,500 240 1,280 $67,800 $92,000 80 60 600 300 300 1,200 1,000 2,000 11,500 7,000 54,000 80,000 26,000 The company allocates service department costs by the step-down method in the following order: Administrative (number of employees), Janitorial (space occupied), and Equipment Maintenance (machine-hours). Departmental costs before allocations Allocations: Required: Using the step-down method, allocate the service department costs to the operating departments. (Negative amounts should be indicated by a minus sign.) Administrative Janitorial Maintenance Total costs after allocation Service Departments Administrative Janitorial Maintenance $ 0 $ Operating Departments 0 $ 0 $ Operating Departments Prep Finishing 0 $ 0 Total

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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Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResources GeneralFactory Fabricating Assembly Direct costs $165,000 $380,000 $114,200 $90,000 Normal activity: Number of employees — 40 70 150 Square footage 1,800 — 5,500 13,200 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded…
Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Square Feet Asset Values Employees Materials 26 30,000 $ 9,300 Personnel 13 12,000 2,480 Manufacturing Packaging 52 66,000 37,820 39 12,000 12,400 Total 130 120,000 $ 62,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 82,700 Number of employees Allocation Base 52,000 Square feet occupied 23,500 Asset values $ 158,200 Allocate each of the three indirect expenses to the four departments.
Karen Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Allocation Base $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Cost Supervision Utilities Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet 66,500 9,500 95,000 19,000 Asset Values 58 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 70 64 Total 200 190,000 $69,000 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a summary table that reports…
Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: Operating Department Service Department Physical General Sales Management $ 33,384 $ 68,070 Plant After-Sales $ 232,830 Departmental costs Employee time Space occupied $ 292,500 33,000 6,000 5,000 40,000 10,000 5,000 40,000 28,000 General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to: Multiple Choice $321,410 $332,888 $335,534 $335,670
Sierra Company has two operating departments: Mixing and Bottling. Mixing occuples 26,460 square feet. Bottling occupies 17,640 square feet. Maintenance costs of $226,000 are allocated to operating departments based on square feet occupied. Determine the maintenance costs allocated to each operating department. Department Mixing Bottling Total Square Feet 0 Percent of Total % % 0.00 % Cost Allocated $ 0
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