Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Janitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $280,000 Janitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department costs Department $180,000 5,000 Square feet Number of employees 3 Allocate the support department costs to the production departments using the direct method. 42 12 Cutting Department $1,490,000 Cutting Department 1,200 21 Assembly Department $670,000 1,800 Assembly Department

Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Janitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $280,000 Janitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department costs Department $180,000 5,000 Square feet Number of employees 3 Allocate the support department costs to the production departments using the direct method. 42 12 Cutting Department $1,490,000 Cutting Department 1,200 21 Assembly Department $670,000 1,800 Assembly Department

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 7E

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Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detailed in the following table: Instructions 1. Assuming that Hooligan Adventure Supply uses the sequential method to allocate its support department costs, which support department does it most likely allocate first? 2. Based on your response in part (1), determine the total costs allocated from each support department to each production department using the sequential method. 3. If Hooligan Adventure Supply wanted to use a more accurate support department cost allocation method, which method should it choose? What might discourage the company from using this method?
Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400
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Support department cost allocation-direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Janitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $300,000 Janitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department $170,000 4,700 2 44 8 Department costs Square feet Number of employees Allocate the support department costs to the production departments using the direct method. Cutting Department LA Cutting Department $1,500,000 2,400 21 $ Assembly Department SA Assembly Department $680,000 3,600 9 S < 11:15 PM 2/25/2024
Extreme Manufacturing Company provides the following ABC costing information:ActivitiesTotal CostsActivity - cost driversAccount inquiry$390, 00013, 000 hoursAccount billing$ 275,0005, 000, 000 linesAccount verification accounts$130, 50060, 000 accountsCorrespondence letters $22, 0004, 000 lettersTotal costs$817,500 The above activities are used by Departments A and B (among other departments) as follows: Department ADepartment BAccount inquiry hours2, 500 hours4, 000 hoursAccount billing lines800, 000 lines650, 000 linesAccount verification accounts9, 000 accounts7, 000 accountsCorrespondence letters2, 000 letters2, 400 letters How much of correspondence costs will be assigned to Department A ? Question 12 Select one:A. $49, 500B. $11, 242C. $11,000D. $22,000
Support department cost allocation-direct method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Janitorial Department Cafeteria Department Cost Driver Square footage to be serviced Number of employees Janitorial Department $320,000 Janitorial Department cost allocation Cafeteria Department cost allocation Cafeteria Department $170,000 4,500 3 44 10 Department costs Square feet Number of employees Allocate the support department costs to the production departments using the direct method. Cutting Department $ Cutting Department $1,510,000 $ 700 27 Assembly Department $680,000 6,300 3 Assembly Department
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs HR Total $ IT 0 20 $ 156,800 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT HR 1,585 0 $ 249,030 0 $ Publishing 2,536 30 $ 433,400 Cost Allocation To: HR 0 Publishing LA Binding 2,219 50 $ 398,500 0 $ Binding 0
Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: Department Information Systems (IS) Personnel Administration IS 170 115 3,900 Number of IS service tickets Number of employees Square footage occupied The costs of the service departments and the allocation basis for each department follow. Direct Cost $ 33,000 40,000 36,700 Personnel 200 120 8,000 Administration Residential Commercial 155 1,410 107 138 3,800 16,100 Allocation Base IS service tickets Employees Square footage occupied. 940 162 69,500 Required: a. Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department? b. Assume the…
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs IT HR Total IT $ 0 16 $ 152,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. HR 1,525 0 $ 247,950 152,000 Answer is not complete. Cost Allocation To: IT HR 152,000 $ 247,950 Publishing 2,440 24 $ 431,000 $ 247,950 Publishing $ Binding 2,135 40 $ 392,500 0 Binding 0
Thornton Corporation's computer services department assists two operating departments in using the company's information system effectively. The annual cost of computer services is $626,200. The production department employs 37 employees, and the sales department employs 25 employees. Thornton uses the number of employees as the cost driver for allocating the cost of computer services to operating departments. Required Allocate the cost of computer services to operating departments. Department Allocated Cost Production Sales
Renats Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Employees Square Feet Asset values $ 18,358 4,148 Department Materials Personal Manufacturing Packaging Total Supervision expences Department Materials Personnel Manufacturing Packaging Totals Utilitiec The four departments share the following Indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Cost Allocation Base Supervision utilities $82,880 Number of employees 59,888 Square feet occupied 27,880 Asset values $ 168,000 Insurance Total Department Materials Personnel Manufacturing Packaging Allocate each of the three Indirect expenses to the four departments. Totals 58 Incurance Department Materials Personnel Manufacturing Packaging 8 70 64 Totals 66,500 9,500 95,000 19,808 198,800 Allocation Base 38,648 15,878 $ 69,000 Allocation Bate Allocation Base Percent of Allocation Baca Numerator Denominator of Total Percent…