tal buRequirements1. Allocate the two support departments' costs to the two operating departmentsusing the following methods:a. Direct methodb. Step-down method (Allocate AS first)C. Step-down method (Allocate IS first)2. Compare and explain differences in the support-department costs allocated toeach operating department.3. What approaches might be used to decide the sequence in which to allocatesupport departments when using the step-down method?Data table12Budgeted overhead costs before any3 interdepartment cost allocationsSupport work supplied by AS(budgeted head count)4Support work supplied by IS5 (budgeted computer time)BASSUPPORT0IS10%25%X0Dhas two supportgovernment consulting (GOVT) andGOVTirect method. (Do not round intermediany zero balances.)tmentsCORPOPERATING$ 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,00040%CORP30%Total35%F60%Total-100%100% Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two supportdepartments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020,Phoenix's cost records indicate the following:(Click the icon to view the cost records.)Read the requirements.Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest wholedollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.)Operating DepartmentsSupport DepartmentsASGOVTCORPDirect MethodBudgeted overhead costsbefore interdepartment cost allocationsAllocation of AS costsAllocation of IS costsTotal budgeted overhead of operating departments………….ISTotal

1. Direct Distribution Method Service Department Costs are allocated over the production…

Data table 1 2 A 3 S Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 4 (budgeted head count) Support work supplied by IS (budgeted computer time) 5 B SUPPORT AS C 10% IS 25% D 0 OPERATING GOVT 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,000 이 40% E 30% CORP 35% F LL 60% Total 100% 100%

Data table 1 2 A 3 S Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 4 (budgeted head count) Support work supplied by IS (budgeted computer time) 5 B SUPPORT AS C 10% IS 25% D 0 OPERATING GOVT 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,000 이 40% E 30% CORP 35% F LL 60% Total 100% 100%

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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QUESTION 2 The following data have been provided by Mathews Corporation: Budgeted production 6.900 units Standard machine-hours per unit 9.4 machine-hours Standard lubricants rate $1.20 per machine-hour Standard supplies rate $1.00 per machine-hour Actual production 7,000 units Actual machine-hours (total) 66.230 machine-hours Actual lubricants cost (total) $78.100 Actual supplies cost (total) $66.536 Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to: $306 U $736 U $430 U $736 F
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Exercise 17-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2 Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating Assembly Overhead cost $ 1,000,000 $ 384,000 Direct labor hours 125,000 DLH 48,000 DLH Machine hours 100,000 MH 82,500 MH Laval reports the following for one of its products, a desk lamp. Number of Units Fabricating Department Assembly Department Direct Labor Hours per Unit Machine Hours per Unit Direct Labor Hours per Unit Machine Hours per Unit Desk lamp 5,000 4 DLH per unit 2 MH per unit 1 DLH per unit 0.4 MH per unit Required:1. Determine the plantwide overhead rate using 173,000 direct labor hours as the allocation base.2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the…
Exercise 17-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2 Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating Overhead cost $ 1,280,000 Direct labor hours Machine hours 182,500 DLH 80,000 MH Assembly $ 420,000 30,000 DLH 73,500 MH Laval reports the following for one of its products, a desk lamp. Number of Desk lamp Units 5,000 Required: Fabricating Department Assembly Department Direct Labor Hours Machine Hours per Direct Labor Hours Machine Hours per per Unit per Unit Unit 5 DLH per unit 4 MH per unit Unit 3 DLH per unit 0.5 MH per unit 1. Determine the plantwide overhead rate using 212,500 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and…
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Division Accounting Personnel Information Technology Sales Production 8. 9. 10. 90 Number of Employees No Shows Pald (Non- Cancellations Registrations Attended refundable) (Refundable) 50 26 14 (I) 208 150 185 TRAINING ATTENDANCE AND RELATED COSTS BY DIVISION TRAINING ATTENDANCE C. $40,000. D. $41,600. 81 156 102 157 The value of (III) is A. $31,200. B. $32,448. The value of (IV) is A. $6,525. B. $7,050. C. $9,225. D. $9,450. 6 28 31 23 3 24 17 5 Attendance Ratio of Those Registered 0.52 0.90 (II) Adjusted Cost per Total Cost per Salary Registration Registration Cancellation Training Registration (5) (5) Payment (5) Refunds ($) Cost (5) (5) 6,700 100 5,000 1,000 10,700 268 2,700 225 (IV) 47,200 6,000 0.85 4,625 0.75 10,400 200 75 The value of (V) (rounded to the nearest whole dollar) is A. $71. B. $83. C. $86. D. $98. RELATED COSTS Registration Cost 140 60 6,750 (III) 21,000 11,100 4,800 106 257 185 2,380 24,620 300 15,425 (V)
QUESTION 4 (S) 20 Direct material cost: ($) 20 Direct labor cost: 10 The following anticipated data are for the next year of operations: Per unit Variable production overhead 10 Variable nonproduction overhead 5 They are estimated the fixed production overhead; fixed nonproduction overhead of 5'mil 0.9 and 5'mil 0.1 respectively. There is no opening inventory; budgeted production and sales volume is 120,000 units. Requirements: 1. Compute product cost under absorption costing and unit selling price if the markup percentage is 50% of product cost. 2. If the company want to achieve target net income of $'mil 3.6, how many percentages of margin on variable cost should be applied
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Exercise 11-36 (Algo) Cost Allocation: Step Method (LO 11-3) Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT M1 M2 Repairs — 0 % 0 % 40 % 60 % HR 10 % — 20 % 35 % 35 % IT 0 % 10 % — 20 % 70 % The direct costs of the service departments in the previous period were $92,000 for Repairs, $111,600 for HR, and $207,000 for IT. Required: Use the step method to allocate the service department costs to the production departments. Allocate HR costs first, followed by IT, and then Repairs. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
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