Answered: common fixed expenses

Business

Accounting

common fixed expenses

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Required: If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. Overhead consists of costs of supervision,…
WV Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $82,000 annually and one salaried estimator who is paid $46,000 annually. The corporate office has two office administrative assistants who are paid salaries of $50,000 and $37,000 annually. The president's salary is $153,000. How much of these salaries are common fixed expenses?
A sada manufacturer has two operating departments. Miong and Botting Mixing has 600 employees and Botting has 400 employees. Office costs of $320,000 are allocated to operating departments based number of employees. The office costs allocated to the Botting department are Murple Choice O O O $90,000 $64,000 $200,000 $192.000
Foxx Company incurs $565000 overhead costs each year in its three main departments, setup ($30000), machining ($375000), and packing ($160000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxx’s two products is as follows: Product A1 Product B1 Number of setups 20 20 Machining hours 1000 4000 Orders packed 150 350 Number of products manufactured 600 400 Using ABC, how much overhead is assigned to Product A1 each year? $113000 $282500 $138000 $427000
The manager of a crew that installs wood floors has tracked the crew’s output over the past several weeks. Each worker works 40 hours per week, and earns $21 per hour. The wholesale cost of lumber to the company is $6 per square foot, and the company charges its customers $15 per square foot of flooring installed. The firm’s overhead rate is 150%. Week Crew Size Lumber Used (sq. ft) Flooring Installed (sq ft) 1 4 480 420 2 2 250 238 a. Calculate labor productivity for each of the weeks shown. Use the best measure of output and labor available. b. Now calculate multifactor productivity for each of the weeks shown. Explain your results imply in terms of dollars of output
You are the division president of Stable Division of Gigabit Inc. Your best friend is the division of Giga’s Turmoil Division. Each division has 5,000 employees. Last year Stable Division had a turnover of 1,000 employees and Turmoil Division had a turnover of 4,000 employees. Giga’s personnel department only provides service to Stable and Turmoil Divisions. The total annual cost of the personnel department is $100,000. Required: As president of Stable Division how would you allocate the cost of the personnel department? How do you think your best friend, the president of Turmoil Division, would allocate the cost of the personnel department? You are going to be transferred to Turmoil Division but before are transferred you are asked by the CEO to recommend an allocation method. What do you recommend? Is it ethical to recommend different allocation methods depending on which division you will be heading?
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Dee Beach, the consultant introduced at the beginning of section three of the chapter, has obtained the following data relative to the Barnes & Riley consulting job: Partner Labor 5 2000 $250,000 Associate Labor 20 2000 $100,000 Number of Attorneys Annual billable hours per attorney Annual compensation per attorney Administrative Support $1,000,000 Legal Support $2,500,000 Annual overhead estimate Assume that the La Mesa job will require 50 partner hours and 20 associate hours, while the El Cajon job will require 15 partner hours and 55 associate hours Step 1- Complete the following... Using a simplified costing system with one direct cost category for professional labor and one indirect cost category for support costs with professional labor hours as the allocation base, compute the bid price for the La Mesa job and the El Cajon job, assuming a 25% mark-on percentage. (Round to the nearest whole dollar.) 1. 2. Do you think that your results seem reasonable? Step 2 - Using an…
The service department at Major Motors sold $48,000 in service last month. They had direct costs of $16,500 to pay their technicians. They were not given credit for any parts sales or expenses because that was the responsibility of their separate parts department. They were, however, allocated $29,250 in fixed expenses. What is the gross profit Major Motors earned last month?
Longyearbyen Co. incurs $1,050,000 of overhead costs each year in its three main departments, machining ($600,000), inspections ($300,000) and packing ($150,000). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. In the past a traditional overhead allocation system was used using direct labor hours. They are considering switching to an activity based costs allocation of overhead. Information about Longyearbyen's two products is as follows: Product Beer 3,000 MHs Machine Hours Inspections Product Coal 1,000 MHs Orders Packed 100 Inspections 350 orders packed 1,700 DLHS 500 Inspections 650 orders packed Direct Labor Hours 1,800 DLHS Under an activity based costing allocation, Beer will be allocated $ more than under the old traditional system?
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.1 hours. On average, HHH completes about 21,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials $39,900 Direct labor 655,200 Variable overhead 21,000 Fixed overhead 25,200 Required: If required, round your answers to the nearest cent. 1. Calculate the prime cost per cleaning.$fill in the blank 1per cleaning 2. Calculate the conversion cost per cleaning.$fill in the blank 2per cleaning 3. Calculate the total variable cost per cleaning.$fill in the blank 3per cleaning 4. Calculate the total service cost per cleaning.$fill in the blank 4per cleaning 5. What if rent on the office that Jean and Tom use to run HHH increased by $2,100? Which of the following statements best describes the effect of this on HHH's costs?