Cariman Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Human Resources and Information Services). For the last quarter of 2020, Cariman's cost records indicate the following: Budgeted overhead costs before any inter- department cost allocations Support work supplied by HR SUPPORT PRODUCTION Information Machining Assembly Total Services Human Resources (HR) (IS) $400,000 $2,000,000 $10,912,000 $14,916,000 $28,228,000 0 25% 40% 35% 100% (Number of employees) Support work 10% 0 30% 60% 100% supplied by IS (Processing costs)

Cariman Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Human Resources and Information Services). For the last quarter of 2020, Cariman's cost records indicate the following: Budgeted overhead costs before any inter- department cost allocations Support work supplied by HR SUPPORT PRODUCTION Information Machining Assembly Total Services Human Resources (HR) (IS) $400,000 $2,000,000 $10,912,000 $14,916,000 $28,228,000 0 25% 40% 35% 100% (Number of employees) Support work 10% 0 30% 60% 100% supplied by IS (Processing costs)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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Carica Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Materials Requisitions and Utility Services). For the last quarter of 2020, Carica's cost records indicate the following: SUPPORT PRODUCTION \table[[, \table[[Materials], [Requisitions], [(MR)]], \table [[Utility], [Services], [(US )]], Machining, Assembly, Total], [\table [[Budgeted], [overhead costs], [before any inter-], [department cost], [allocations]], $200,000, $1,000,000, $5, 456, 000, $7,458, 000, $14, 114,000 Required: 1. Allocate the two support departments 'costs to the two operating departments using the following methods: a. Direct method b. Step-down method ( allocate MR first) c. Step-down method (allocate US first) d. The Algebraic method. 2. Compare and explain differences in the support - department costs allocated to each production department. 3. What approaches might be used to decide the sequence in which to allocate support departments…
Buller Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2019:Budgeted manufacturing overhead costs Budgeted machine-hoursActual manufacturing overhead costs Actual machine-hoursRequired:$4,800,000 180,000 $3,990,000150,0001. Calculate the budgeted manufacturing overhead rate.2. Calculate the manufacturing overhead allocated during 2019.3. Calculate the amount of under- or overallocated manufacturing overhead. Whydo Buller’s managers need to calculate this amount?
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Carica Company is a manufacturer with two production departments (Machining andAssembly) as well as two support departments (Materials Requisitions and Utility Services).For the last quarter of 2020, Carica’s cost records indicate the following: Required: 1. Compare and explain differences in the support-department costs allocated to eachproduction department. 2. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2020 were as follows. Budget Actual Indirect materials $15,300 $14,700 Indirect labor 19,800 20,300 Utilities 10,100 10,900 Supervision 5,800 5,800 All costs are controllable by the department manager.Prepare a responsibility report for April for the cost center. HANNON COMPANYAssembly DepartmentManufacturing Overhead Cost Responsibility ReportFor the Month Ended April 30, 2020 Difference Controllable Cost Budget Actual FavorableUnfavorableNeither Favorablenor Unfavorable Select an opening responsibility report item Indirect MaterialsIndirect LaborSupervisionUtilities $Enter a dollar amount $Enter a dollar amount $Enter the difference Select an option…
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What approaches might be used to decide the sequence in which to allocate support departments when using the step-down method?
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Also include controllable cost