Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgetedmaintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are$216,000 and $324,000, respectively. Data on budgeted maintenance - hours and number of employees are as follows:Budgeted costsBudgetedmaintenance - hoursNumber of employeesSupport DepartmentsMaintenance PersonnelDepartmentProductionDepartmentsDepartment$370,000ΝΑA$170,000 $216,000 $324,0008001,270630B65ΝΑ280700Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)

The objective of the question is to determine the amount of Maintenance Department costs that will…

Answered: Hanung Corp has two service…

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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The managers of Cheyenne Manufacturing are discussing ways to allocate the cost of service departments, such as quality control and maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information: Quality Control Maintenance Machining Assembly Total Budgeted overhead $374,000 $200,000 $392,000 $272,000 $1,238,000 costs before Allocation Budgeted machine – – 45,000 – 45,000 Hours Budgeted direct – – – 23,000 23,000 labour hours Budgeted hours – 5,000 15,000 5,000 25,000 of service: Quality Control Maintenance 8,000 – 14,400 9,600 32,000
The accountant for Sam Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs $ 50,000 $45,000 $275,000 $300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000 If the step-down method is used and maintenance is allocated first, the total cost allocated to the cutting department will be $55,757 $ 39,243 $20,822 $40,208. I need help with explanation. Thanks!
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Subject- account
National company has two support departments A&B and two operating departments X&Y. for the first quarter 2021, Budgeted overhead costs before any interdepartmental costs allocations were: A $800,000, B $1,500,000, X $5,000,000 and Y $11,000,000. Support work supplied by A to B 20%, to X 50% and to Y 30%. Support work supplied by B to A 25%, to X 35% and to Y 40%. Using direct method, the total cost of :department A before allocation is .a .$1,175,000 .b .$800,000 .C .$1,500,000 .d .$0
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Burwell Manufacturing is organized into two divisions (Agriculture and Mining) and a corporate headquarters. The financial group of the corporate staff prepared financial operating plans (budgets) for the two divisions for the upcoming year (year 1). Selected information from the plans is as follows: Employees (full-time equivalent, or FTE) Revenues ($000) Direct division costs ($000) Operating profit before allocation ($000) Agriculture 23 $ 8,000 5,200 $ 2,800 Mining 52 $ 17,000 13,300 $ 3,700 Corporate overhead costs are expected to be $3.5 million in year 1. Of the $3.5 million, $1.25 million is fixed and the remainder is variable. Two-thirds of the variable cost is variable with respect to revenue. The other third is variable with respect to the number of full-time equivalent (FTE) employees. Division managers are evaluated and compensated in part on division operating profit (including any allocated corporate costs) relative to the budget. Corporate overhead at Burwell is…
The budgeted overheads and cost driver volumes of XYZ are as follows. Cost pool Budgeted Overheads (RM) Material procurement 580,000 Material handling 250,000 Set- up 415,000 Maintenance 970,000 Quality control 176,000 Machinery 720,000 Cost driver Budgeted volume No of orders 1,100 No of movements 680 No of set ups 520 Maintenance hours 8400 No of inspection 900 No of machine hours 24,000 The company has produced a batch of 2,600 components of A.X-1S, its material cost was RM 130,000 and labour cost RM 245,000. The usage activities of the said batch are as follows. Material orders is 26. Maintenance hours is 690. Material movements is 18. Inspection is 28. Set ups is 25. Machine hours 1,800 Required (b) Calculate the cost of batch of components using Activity Based Costing.

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