City company has service departments solution accounting questions City Company has two service departments, Maintenance, and Personnel, as well as twoproduction departments, Mixing, and Finishing. Maintenance costs are allocated based onsquare footage while personnel costs are allocated based on the number of employees. Thefollowing information has been gathered for the current year:Maintenance Personnel Mixing FinishingDirect dept. costs $18,000Sq. footage800No. of employees 8$12,000$15,000 $25,0004001,600 1,200122432If the step-down method is used to allocate costs, and the Maintenance Department rendersthe greatest service, the total amount of overhead that would be allocated from Personnel toMixing is:A. $9,000.B. $6,000.C. $5,143.D. $6,107

Step 1: Define Cost AllocationMost manufacturing companies have different service departments and…

Answered: City Company has two service…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 14EA: A production department within a company received materials of $10,000 and conversion costs of...

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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
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Octogon, Inc. has three operating departments: Cutting, Assembling, and Finishing. The data below are provided for the current year: Assembling Dept # workers 4,000 Cutting Dept Finishing Dept 5,000 1,000 Square ft occupied 15,000 sq ft 12,000 sq ft 23,000 sq ft Total Maintenance costs of $220,000 are allocated to each department based on the number of square feet. Determine the Maintenance costs to be allocated to each department. Check figure: Finishing Dept $101,200
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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…
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University Printers has two service departments, Maintenance and Personnel, and two operating departments, Printing and Developing. Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period. Maintenance Personnel Printing Developing Machine-hours 1,000 1,000 3,000 2,000 $10,000 Labor-hours. 500 500 Department direct costs. $5,000 $12,000 $15,000 Required Use the direct method to allocate these service department costs to the operating departments.
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Required information The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Costs Number of employees Square feet of space occupied Hours of press time Departmental costs before allocations Allocations: Service Departments Administration Janitorial Maintenance $ 144,200 $ 108,150 $ 49,440 140 20,000 Administration costs Janitorial costs Maintenance costs Total costs after allocations 60 15,000 Administration $ The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). Service Departments Janitorial $ 144,200 $ 108,150 $ 35 10,000 Required: Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line…

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