Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $200,000 are allocated based on the number of computer log-on hours. The costs of user departments Music and Books are $142,500 and $171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Budgeted costs Budgeted warehouse-hours Number of computer hours Warehouse Department $370,000 ΝΑ 100 O $118,500 O $105,333 O $79,000 O $74,063 Data Center Department $200,000 300 ΝΑ Music Books $142,500 $171,000 1,200 1,500 500 1,000 Using the step-down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? Stop sh

Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $200,000 are allocated based on the number of computer log-on hours. The costs of user departments Music and Books are $142,500 and $171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Budgeted costs Budgeted warehouse-hours Number of computer hours Warehouse Department $370,000 ΝΑ 100 O $118,500 O $105,333 O $79,000 O $74,063 Data Center Department $200,000 300 ΝΑ Music Books $142,500 $171,000 1,200 1,500 500 1,000 Using the step-down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? Stop sh

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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 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)
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Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $360,000 are allocated on the basis of budgeted warehouse - hours. Data Center Department costs of S180,000 are allocated based on the number of computer log - on hours. The costs of operating departments Music and Books are $135,000 and S162,000, respectively. Data on budgeted warehouse - hours and number f computer log - on hours are as follows: Support Departments Warehouse Department Production Departments Data Center Department Music Books Budgeted costs Budgeted warehouse - hours Number of computer hours $360,000 $180.000 $135,000 $162.000 NA 570 1,060 1,580 300 NA 830 1,100 Using the step - down method, what amount of Data Center Department cost will be allocated to the Warehouse Department if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up) O A. $62,945 O B. $0 OC. $24,215 O D. $180,000
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Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $300,000 are allocated on the basis of budgeted warehouse - hours. Data Center Department costs of $120,000 are allocated based on the number of computer log - on hours. The costs of operating departments Music and Books are $105,000 and $126,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Production Departments Warehouse Data Center Music Books Department $300,000 Department $120,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $105,000 1,060 $126,000 NA 560 1,520 210 NA 860 1,100 Using the step - down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) ..... O A. $35,446 O B.…
Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center Warehouse Department costs of $340,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $140,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $120,000 and $144,000, respectively Data on budgeted warehouse-hours and number of computer log-on hours are as follows Support Departments OA. $77.778 OB. $62,222 OC. $140,000 OD. $55.495 Production Departments Music Books Warehouse Department Data Center Department Budgeted costs $340,000 $140,000 $120,000 Budgeted warehouse-hours 510 1,020 NA 240 Number of computer hours NA 880 Using the direct method. what amount of Data Center Department costs will be allocated to Department Music (Do not round any intermediary calculations) $144,000 1,570 1,100
Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted warehouse - hours. Data Center Department costs of $100,000 are allocated based on the number of computer log - on hours. The costs of operating departments Music and Books are $112,500 and $135,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Production Departments Warehouse Data Center Music Books Department $350,000 Department $100,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $112.500 $135,000 1,530 NA 590 1,020 210 NA 850 1,040 prrect Using the step - down method, what amount of Data Center Department cost will be allocated to the Warehouse Department if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up) O A. $36,646 B. $10,000 C. $100,000 O D. $0