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 $135,000 85,000 47,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining Assembly 0.7 0.1 0.6 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). 0.3 0.1

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 $135,000 85,000 47,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining Assembly 0.7 0.1 0.6 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). 0.3 0.1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Purchasing material Number of purchase orders $ 130,800 240 purchase orders Receiving material Direct materials cost 238,400 $ 2,980,000 Setting up equipment Number of production runs 231,840 120 runs Machine depreciation and maintenance Machine-hours 80,260 16,052 hours Ensuring regulatory compliance Number of inspections 459,000 54 inspections Shipping Number of units shipped 1,087,200 604,000 units Total estimated cost $ 2,227,500 In addition, management…
Linger Products uses a two-stage allocation method to assign costs to its products. The following information has been provided for March: Product 1 Product 2 Total Units 3,000 2,000 5,000 Machine hours 2,000 4,000 6,000 Direct labor hours 2,000 2,000 4,000 Direct materials $ 60,000 $ 60,000 $ 120,000 Direct labor 45,000 45,000 90,000 Manufacturing overhead Utilities (machine related) $ 3,000 Supplies (labor related) 8,000 Training (labor related) 20,000 Supervision (labor related) 17,000 Machine depreciation (machine related) 24,000 Lease on factory (machine related) 33,000 Miscellaneous (labor related) 5,000 Total manufacturing overhead $ 110,000 Required:(a) Allocate the manufacturing overhead to two cost pools: machine-related and labor-related.(b)…
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 $115,000 65,000 54,000 43,000 Required A Required B Proportion of Services Used by Machining Maintenance Cafeteria 0.7 From Service department costs Maintenance Cafeteria Total Costs 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). 0.5 0.1 Complete this question by entering your answers in the tabs below. Maintenance Cafeteria Assembly The order of allocation starts with Maintenance. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) To 0.3 0.2 Machining…
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 From: Direct Costs Repair $ 147,600 Service department costs Repair Quality control Total 112, 200 48,300 140, 210 $ Repair 8 0.3 0 $ Proportion of Services Used by Quality Control Fabricating Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amounts. 0.3 Cost Allocation To: Quality Control 0.5 8.2 Fabricating $ Finishing 0.2 0.5 0 $ Finishing
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 From: Service department costs Repair Quality control Total Direct Costs Repair $ 132,600 94,200 40,200 242,740 Proportion of Services Used by Quality Control 0 0.3 Repair 0.3 0 Fabricating Finishing Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. Quality Control Cost Allocation To: 0.5 0.1 0.2 0.6 Fabricating Finishing
SCS Co. uses activity-based costing in their manufacturing process. The company produces two products, ABC and XYZ. SCS has provided their costing department the following information from this year’s budget relating to the production of these two products: ABC XYZ Units to be produced 4,000 6,000 Machine-hours expected 80 160 Direct labor-hours expected 160 240 Materials handling (number of moves) 48 56 Machine setups (number of setups) 16 12 The following costs are expected to be incurred throughout the year and are related to the cost drivers being measured: Expected Total Costs Direct Labor Wages $40,000 Materials handling $3,200 Labor-related overhead $33,600 Machine setups $5,600 What is the expected overhead allocated to product XYZ?NOTE: Round all per-unit costs to the nearest cent. Select one: a. None of the amounts listed. b. $18,116.96 c. $22,560.00 d. $21,883.12 e. $24,283.12
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: Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.
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 Proportion of Services Us by Quality Direct Costs Repair $ 130,600 90, 200 38,400 71, 600 0 0.8 Control Fabricating Finishing 0.2 0 Required: Use the step method to allocate the service costs, using the following: 0.5 0.1 a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). 0.3 0.1
Using the sequential method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has determined to allocate Janitorial costs before Cafeteria costs. It has the following information about its two service departments and two production departments, Cutting and Assembly: Number of Employees 20 10 60 20 Costs Janitorial Department $450,000 Cafeteria Department 200,000 Cutting Department 1,500,000 Assembly Department 3,000,000 Square Feet 100 10,000 2,000 8,000 The percentage (proportional) usage of the Janitorial Department by the Cutting Department is Oa. 20% Ob. 9.9% Oc. 80% Od. 10%
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Type A Type BAnticipated volume (units) 24,000 45,000 Direct-material cost per unit $ 28 $ 42 Direct-labor cost per unit 33 33 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow. Type A Type B TotalSetups 140 100 240 Machine hours 48,000 67,500 115,500 Outgoing shipments 200 150 350 The firm’s total…
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
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 184,800 30,800 DLHs Purchase orders Number of orders $ 6,900 230 orders Parts management Number of part types $ 81,120 104 part types Board etching Number of boards $ 45,000 1,800 boards General factory Machine-hours $ 150,300 16,700 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 7,000 14,300 4,400 5,100 Purchase orders (orders) 58 26 46 100 Parts management (part types) 30 18 37 19 Board etching (boards) 500 720 580 0 General factory…