Morrell Financial Services (MFS) has three service departments: Accounting, Information Technology (IT), and Personnel. MFS also hastwo operating departments (Advice and Brokerage). Data on service department usage and service direct costs follow:AccountingITPersonnelDirect costUsing DepartmentAccountingITPersonnelAdvice0%16%6%23%31%Brokerage40%0%10%29%45%11%13%0%39%37%$ 197,000$ 281,000$ 264,500NANA**Not applicable for this problem.Required:Assume that Morrell Financial Services uses the reciprocal method of service department cost allocation. What is the total servicedepartment cost allocated to Advice? To Brokerage? (Hint: Use the reciprocal method spreadsheet shown in Exhibit 11.22 as a start toyour analysis.)Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollars.AdviceBrokerageCost Allocated

Reciprocal Method of Cost Allocation:The reciprocal method of cost allocation is a technique used in…

Answered: Assume that Morrell Financial Services…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs.
Which of the following is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.
A department that incurs costs but does not generate revenue is calleda(n) (a) profit center.(b) cost center.(c) investment center.(d) limited center.
Management uses Cost Volume Profit (CPV) analysis as a planning process to predict the future volume of activity, costs incurred, sales made and profit received. Required: i. List and explain FIVE assumptions in C-V-P analysis.
Cost objects may be: Multiple Choice products. services. departments. All of these answers are correct.
Explain in details what the textbook means by a “cost hierarchy”
4) Design ABC system for EON and Brothers (discuss steps) 5) What are the Costs per unit of Alfa and Beta under traditional and ABC costing systems?What would be the prices of Alpha and Beta traditional and ABC costing systems? Comparethe costs and prices calculated in the two systems (Calculations should be shown in theappendix) and for analysis 6) Discuss your recommendation on the viability of ABC for EON and Brothers Ltd., given thefinancial director's concerns.
Freitas Corporation was organized early in 2024. The following expenditures were made during the first few months of the year: Attorneys’ fees in connection with the organization of the corporation $ 12,200 State filing fees and other incorporation costs 3,200 Purchase of a patent 20,100 Legal and other fees for transfer of the patent 2,200 Purchase of equipment 30,100 Preopening salaries and employee training 40,100 Total $ 107,900 Required: Prepare a summary journal entry to record the $107,900 in cash expenditures. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Decisions where relevant cost analysis might be used effective is Make or Buy Decision. Explain IN YOUR OWN WORDS what "Make or Buy Decision" is AND MUST USE EXAMPLES IN YOUR DESCRIPTION.
Decisions where relevant cost analysis might be used effective is Sell or process decisions. Explain IN YOUR OWN WORDS what "sell or process decision" is AND MUST USE EXAMPLES IN YOUR DESCRIPTION.

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

Assume that Morrell Financial Services uses the reciprocal method of service department cost allocation. What is the total service department cost allocated to Advice? To Brokerage? (Hint: Use the reciprocal method spreadsheet shown in Exhibit 11.22 as a start to your analysis.)