• Vこの* COFL今4Check my wModel, Inc., produces model automobiles made from metal. It operates two production departments, Molding and Painting, and hasthree service departments, Administration, Accounting, and Maintenance. The accumulated costs in the three service departmentswere $265,000, $420,000, and $207,000, respectively. Management is concerned that the costs of its service departments aregetting too high. In particular, managers would like to keep the costs of service departments under $3.50 per unit on average. Youhave been asked to allocate service department costs to the two production departments and compute the unit costs.The company decided that Administration costs should be allocated on the basis of square footage used by each production andservice department. Accounting costs are allocated on the basis of number of employees. Maintenance costs are allocated on thebasis of the dollar value of the equipment in each department. The use of each base by all departments during the current periodfollows.Used byAccounting MaintenanceAllocation BaseBuilding areaEmployeesEquipment value (in thousands)AdministrationMolding432,00092Painting000'9123$ 228.0069$114.00$57.00$171.00$ 16. 50Direct costs of the Molding Department included $230,000 in direct materials, $345,000 in direct labor, and $117,500 in overhead. ThePainting Department's direct costs consisted of $206,000 in direct materials, $174,000 in direct labor, and $80,000 in overhead.Required:a. Using the step method, determine the allocated costs and the total costs in each of the two producing departments. Ignore self-usage (for example, ignore work done by Administration for itself). Rank order the allocation as follows: (1) Maintenance, (2)Accounting, and (3) Administration.b. Assume that 100,000 units were processed through these two departments. What is the unit cost for the sum of direct materials,direct labor, and overhead (1) for Molding, (2) for Painting, and (3) in total?< Prev4 of 4here to searchDeleteNO+DIna&%23%97.H.B.AltAltCtrl

Direct Cost - Direct costs are expenses that may be traced back to a specific cost object. The…

ates two production departments, Molding and Painting, and has nance. The accumulated costs in the three service departments ent is concerned that the costs of its service departments are s of service departments under $3.50 per unit on average. You roduction departments and compute the unit costs. d on the basis of square footage used by each production and number of employees. Maintenance costs are allocated on the use of each base by all departments during the current period ing 30 16 30 Used by Maintenance Molding 54,000 432,000 46 $ 16.50 92 $ 228.00 t materials, $345,000 in direct labor, and $117,500 in overhead. The materials, $174,000 in direct labor, and $80,000 in overhead. of 4 Painting 72,000 69 $114.00 tal costs in each of the two producing departments. Ignore self- Rank order the allocation as follows: (1) Maintenance, (2) epartments. What is the unit cost for the sum of direct materials, total? Next >

ates two production departments, Molding and Painting, and has nance. The accumulated costs in the three service departments ent is concerned that the costs of its service departments are s of service departments under $3.50 per unit on average. You roduction departments and compute the unit costs. d on the basis of square footage used by each production and number of employees. Maintenance costs are allocated on the use of each base by all departments during the current period ing 30 16 30 Used by Maintenance Molding 54,000 432,000 46 $ 16.50 92 $ 228.00 t materials, $345,000 in direct labor, and $117,500 in overhead. The materials, $174,000 in direct labor, and $80,000 in overhead. of 4 Painting 72,000 69 $114.00 tal costs in each of the two producing departments. Ignore self- Rank order the allocation as follows: (1) Maintenance, (2) epartments. What is the unit cost for the sum of direct materials, total? Next >

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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Mervon Company has two operating departments: Mixing and Bottling. Mixing occupies 22,000 square feet. Bottling occupies 18,000 square feet. Indirect factory costs include maintenance costs of $200,000. If maintenance costs are allocated to operating departments based on square footage occupied, determine the amount of maintenance costs allocated to each operating department.
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Required A Required B Direct Costs Repair $ 136,600 102, 200 43,800 81,800 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Complete this question by entering your answers in the tabs below. $ $ Repair Proportion of Services Used by Quality Control 0 0.8 Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be indicated by a minus…
Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet occupied. Listed below are the operating data for the current period: Department Direct Expenses Square Feet Maintenance $ 49,500 21,000 Milling 92,500 42,000 Assembly 121,400 63,000 The total cost of operating the Assembly Department for the current period is:
Hensel Manufacturing separates its manufacturing overhead costs into 2 broad categories: (1) maintenance costs and (2) utility costs. Maintenance costs average $100,000 per month, whereas utility costs average $8,000 per month. Maintenance costs are allocated to 2 activity cost pools: (1) the repair cost pool and (2) the set-up cost pool. Utility costs also are allocated to 2 activity cost pools: (1) the heating and air conditioning cost pool (HVAC) and (2) the machinery cost pool. Maintenance costs are allocated to their unique activity cost pools on the basis of the number of employees associated with each pool. Utility costs are allocated to their unique activity cost pools on the basis of kilowatt-hour (kWh) consumption. Of the company's maintenance employees, 70% engage primarily in repair activities, whereas 30% engage primarily in set-up activities. Approximately 75% of the company's kWh consumption can be traced to HVAC use, whereas 25% of its kWh consumption can be traced to…
alland Manufacturing Company makes two different products, M and N. The company's two departments are named after the products; for example, Product M is made in Department M. Yalland's accountant has identified the following annual costs associated with these two products: Financial data Salary of vice president of production division ................. $160,000 Salary of supervisor Department M .............................. 80,000 Salary Yalland Manufacturing Company makes two different products, M and N. The company's two departments are named after the products; for example, Product M is made in Department M. Yalland's accountant has identified the following annual costs associated with these two products:Financial dataSalary of vice president of production division ................. $160,000Salary of supervisor Department M .............................. 80,000Salary of supervisor Department N ................................. 60,000Direct materials cost Department M…
CakeCo, Incorporated has three operating departments. Information about these departments is listed below. Maintenance is service department at CakeCo that incurred $14,400 of costs during the period. If allocated maintenance cost is based on floor space occupied by each of the operating departments, compute the amount of maintenance cost allocated to the Baking Department. Department Direct Expenses Square Feet 1,500 2,250 750 Mixing $ 26,000 Baking 20,000 Packaging 14,000 $320. $960. $6,000. $9,450. $7,200. 9
Flamingos, Incorporated has two service departments and two operating (production) departments. Administrative Department costs are allocated to the Assembly and Packaging departments based on the number of employees, and Maintenance Department costs are allocated to the Assembly and Packaging departments based on square feet occupied. Data for these departments follows: Department Direct Expenses Number Employees Square Feet Administrative $42,000 Maintenance 27,000 Assembly 82,000 Packaging 57,000 4 The total amount of service department costs (Administrative and Maintenance) that would be allocated to the Packaging Department is: O $33,000. $48,600. $33,600. $16,800. $16,200. 6 1,600 2,400
Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company’s human resources (HR) department. The annual costs of the HR department total $25,000,000 a year. You have the following selected information about the two divisions: Number of Employees Wage and Salary Expense ($000) Northern 2,915 $ 241,800 Southern 2,385 148,200 Required: What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis?
The cost of operating the Maintenance Department is to be allocated to four production departments based on the floor space each occupies. Department A occupies 600 m²; Department B, 900 m²; Department C, 1200 m²; and Department D, 600 m². If the July cost was $17,600, how much of the cost of operating the Maintenance Department should be allocated to each production department? The operating cost for Department A is $ (Simplify your answer.) The operating cost for Department B is $ (Simplify your answer.) The operating cost for Department C is $ (Simplify your answer.) The operating cost for Department D is $ (Simplify your answer.)
Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $14,000,000 a year. You have the following selected information about the two divisions: Northern Southern Required: a. What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? b. What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis? Required A Number of Wage and Salary Expense ($000) $ 173,600 106,400 Complete this question by entering your answers in the tabs below. Employees 2,310 1,890 Division Northern Southern What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Required B HR Cost Required A Required B >…
During the past month, the following costs were incurred in the three production departments and two service departments of Kim & Co.: Supplying Department Administration Factory support Direct cost From: Service department costs Administration Factory support Total allocations Administration Direct costs Total costs 0.10 $ 640,000 Using Department Factory Support Fabrication 0.40 0.30 0.20 $1,720,000 $1,330,000 Required: Allocate service department costs to Fabrication, Assembly, and Finishing using the reciprocal method, and determine the total costs of Fabrication, Assembly, and Finishing after this allocation. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) Assembly 0.20 0.20 $284,000 Administration Factory Support Finishing 0.10 0.50 $254,000 Cost Allocation To: Fabrication Assembly Finishing
ABC; pricingChester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Costs Activity Drivers Utilities $1,080,000 90,000 machine hours Scheduling and setup 982,800 1,170 setups Material handling 2,304,000 2,400,000 pounds of material The company’s products and other operating statistics follow. Product A Product B Product C Direct costs $72,000 $72,000 $81,000 Machine hours 45,000 15,000 30,000 Number of setups 195 570 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000 a. Calculate the unit cost for each product using the appropriate cost drivers for each product.Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Product C Unit cost Answer Answer Answer…