Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Machining Assembly Direct Costs $92,000 62,400 38,800 31,000 Total Costs Proportion of Services Used by Maintenance Cafeteria. Machining 9.8 0.2 quired: mpute the allocation of service department costs to producing departments using the direct method. (Do not round intermediat Iculations.) Prev 0.6 0.1 1 2 Assembly of 13 0.2 0.1 Next > 3

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Machining Assembly Direct Costs $92,000 62,400 38,800 31,000 Total Costs Proportion of Services Used by Maintenance Cafeteria. Machining 9.8 0.2 quired: mpute the allocation of service department costs to producing departments using the direct method. (Do not round intermediat Iculations.) Prev 0.6 0.1 1 2 Assembly of 13 0.2 0.1 Next > 3

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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
Required Information [The following information applies to the questions displayed below.] Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeterial Machining Assembly Direct Costs $100,000 Total Costs 66,400 41,200 33,000 Proportion of Services Used by Maintenance Cafeteria Machining 0.6 0.2 0.5 0.2 Assembly Required: Compute the allocation of service department costs to producing departments using the direct method. (Do not round Intermediate calculations.) 0.3 0.2
Required Information [The following information applies to the questions displayed below.] 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 Fabricating Finishing Direct Costs $ 143,600 Total Allocated Costs 104, 200 44,700 83,500 Repair 0 0.8 Proportion of Services Used by Quality Control 0.2 8 Fabricating Finishing 0.5 0.1 Required: Compute the allocation of service department costs to producing departments using the direct method. Note: Do not round Intermediate calculations. Round your final answers to the nearest whole dollar. 0.3 0.1
[The following information applies to the questions displayed beiow.) Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used by Direct Costs Maintenance Cafeteria Machining Assembly Depantment Machining Assembly $97,000 72,400 44, 800 36,000 Maintenance 0.2 0.5 0.3 Cafeteria 0.8 0.1 0.1 Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labo. and machine-hours worked in each department are as follows: Machining 360 Assembly Job CM-22: Machine-hours 60 Labor-hours Machine-hours Labor-hours se 40 30 Job CM-23: 20 30 340 Required: How much of the service department costs allocated to Machining…
[The following information applies to the questions displayed below.] 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 Direct Costs $ 133,600 96, 200 41,100 76,700 Fabricating Finishing Repair Total Allocated Costs 0 0.8 Proportion of Services Used by Quality Control 0.2 0 Fabricating Finishing Exercise 11-25 (Algo) Cost Allocation: Direct Method (LO 11-1) 0.6 0.1 Required: Compute the allocation of service department costs to producing departments using the direct method. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. 0.2 0.1
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! Required Information [The following information applies to the questions displayed below.] Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Direct Costs $100,000 66,400 41, 200 33,000 Job CM-22: Machine-hours Job CM-23: Labor-hours Machine-hours Labor-hours Machining Assembly Job CM-22 Maintenance Cafeteria 0.6 Machining 150 40 40 30 Proportion of Services Used by Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows: Job CM-23 0.2 Assembly 40 30 20 220 Machining 0.5 0.2 Assembly Required: How much…
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