Gary needs to determine the total costs of his company's tile division and sink division to determine profitability once sales are recognized. The tile division incurs $263,000 in costs, while the sink divisionincurs $371,000 in costs. Two support departments assist the tile and sink divisions, and they incurred the following costs: Business Services, $79,000, and Maintenance, $51,000. Business Services isused 40% of the time by the tile division, while Maintenance spends 75% of its time helping the sink division. Using the direct method to allocate support department costs, what are the total costs forwhich the two operating divisions should be held responsible?Operating DepartmentsTileTotal $304800$SinkTotal costs459200$764000

- Tile division: $307,350- Sink division: $456,650- Total costs: $764,000Explanation:To allocate the…

Answered: Gary needs to determine the total costs…

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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Mackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $14,000,000 a year. You have the following selected information about the two divisions: Northern Southern Required: a. What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? b. What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis? Required A Number of Wage and Salary Expense ($000) $ 173,600 106,400 Complete this question by entering your answers in the tabs below. Employees 2,310 1,890 Division Northern Southern What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Required B HR Cost Required A Required B >…
Balding, Ltd. is composed of 5 divisions. Each division is allocated a share of the overhead of Balding to make divisional managers aware of the cost of running the corporate headquarters. The following information relates to the Metro Division: Sales $6,100,000 Variable Operating Costs $3,640,000 Traceable Fixed Operating Costs $1,560,000 Allocated Corporate Overhead $200,000 If the Metro Division is closed, 100% of the traceable fixed operating costs can be eliminated. What will be the impact on the overall profitability of Balding if the Metro Division is closed? Select one: A. Decrease by $900,000 B. Decrease by $5,900,000 C. Decrease by $4,340,000 D. Decrease by $2,460,000 E. Decrease by $700,000
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