Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Clients Revenues Eastside 25,000 $ 270,000 8,100 $ 99,000 Westside 6,250 $ 180,000 2,700 $ 81,000 Total 31,250 $ 450,000 10,800 $ 180,000 $ 270,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center?

Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Clients Revenues Eastside 25,000 $ 270,000 8,100 $ 99,000 Westside 6,250 $ 180,000 2,700 $ 81,000 Total 31,250 $ 450,000 10,800 $ 180,000 $ 270,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Office Products Inc. manufactures and sells various high-tech office automation products. Two divisions of Office Products Inc. are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a “super chip,” that can be used by both the Computer Division and other external customers. The following information is available on this month’s operations in the Computer Chip Division: Selling price per chip P50 Monthly capacity 10,000 chips Variable costs per chip P20 External sales 6,000 chips Fixed production costs P60,000 Internal sales 0 chips Fixed SG&A costs P90,000 Presently the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. 1.…
Home Depot Pleasanton Gardening Center needs to determine the ordering policy in the ERP system for a new retaining wall blocks. The demand forecast for the new blocks is about 1,000 units annually. To help you get a handle on the carrying and ordering costs, accounting department has given you the list of last year’s spending within warehouse and purchasing division. COST ITEM COST ($) COST ITEM COST ($) Taxes for the warehouse 2,000 Warehouse supplies 280 Receiving and incoming inspection 1,500 Research and development 2,750 New product development 2,500 Purchasing salaries & wages 30,000 Acct. Dept. costs to pay invoices 500 Warehouse salaries & wages 12,800 Inventory insurance 600 Pilferage of inventory 800 Product advertising 800 Purchase order supplies 500 Spoilage 750 Inventory obsolescence 300 Sending purchasing orders 800 Purchasing Dept. overhead 1,000 Accounting department…
Make-or-Buy Decision Wisconsin Arts of Milwaukee employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, and other publications for the production. The pages are delivered to an outside company for printing. The company is considering an outside publication service for the layout work. The outside service is quoting a price of $20.00 per layout page. The budget for the Publication Department is as follows: Salaries $180,000 Benefits 52,000 Supplies 34,000 Office expenses 21,000 Office depreciation 60,300 Computer depreciation 40,200 Total $387,500 The department expects to lay out 33,500 pages. The computers used by the department have an estimated residual value of $26,800. The Publication Department office space would be used for future administrative needs if the department's function were purchased from the outside. a. Prepare a differential analysis report for the make-or-buy decision, considering the…
Green Earth Landscaping Company provides monthly and weekly landscaping and maintenance services to residential customers in the tri-city area. Green Earth has no variable administrative expense. Fixed administrative expenses for June, July, and August include: Salaries $9,400 Insurance 2,250 Depreciation 4,000 Accounting services 600 Required: Question Content Area 1. Construct an administrative expense budget for Green Earth Landscaping Company for the three summer months. Show total amounts by month and in total for the three-month period. Green Earth Landscaping CompanyAdministrative Expense BudgetFor the Summer Months June July August Total Salaries $___ $___ $___ $___ Insurance ____ ____ ____ ____ Depreciation ____ ____ ____ ____ Accounting services ____ ____ ____ ____ Total administrative expense $_____ $____ $____ $____ Question Content Area 2. What if Green Earth Landscaping Company's insurance rates increased at the beginning…
The Charmatz Corporation has a central copying facility. Its offices can supply up to 800,000 copies per year. The copying facility has only two users, Department A and Department B. The following data apply to the coming budget year: Budgeted costs of Copy Support Department are: Fixed costs per year $70,000 per year Variable costs $0.02 per copy The operating departments have estimated their usage as follows: Department A 120,000 copies Department B 480,000 copies Actual usage for the year was: Department A 150,000 copies Department B 450,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage is used to allocate costs under the single-rate method. Actual usage is used to allocate variable costs and budgeted usage is used to allocate fixed costs under the dual-rate method. How will…
Blue Spruce Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2022 is available for Blue Spruce. Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead (a) Total budgeted costs Compute the rate charged per hour of labor. Time Charges $202,800 Labor rate $ 39,000 7,800 $249,600 The company desires a $39 profit margin per hour of labor and a 28% profit margin on parts. It has budgeted for 7,800 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2022 will be $416,000. Material Loading Charges per hour $39,300 14,780 29,120 $83,200
The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 8,030,000 pages Budgeted usage: Software Development 1,630,000 pages Training 3,333,000 pages Management 2,127,000 pages Cost equation $310,000 + $0.02 per page If DCC uses a dual-rate for allocating its costs, how much cost will be allocated to the Management Department, assuming the Management Department actually made 2,130,000 copies during the year? Multiple Choice $84,670. $86,790. $86,275. $135,600.
Perfect Parties, Inc. has several divisions, one of which provides birthday parties at their facility, and has provided the actual and planning budget results for the month of June. The Controller has asked you prepare the Birthday Party Division Budget Performance Report. Please provide me with the answers for the cells in yellow. greatly appreciate your help!
Doug's Diner is planning to expand operations and is concerned that its reporting system might need improvement. The master budget income statement for the Downtown Doug's, which contains a delicatessen and restaurant operation, follows (in thousands). Delicatessen Restaurant Total Sales revenue $700 $2,000 $2,700 Costs Purchases 385 1,100 1,485 Hourly wages Franchise fee 35 437 472 21 40 61 Advertising Utilities 50 100 150 49 63 112 Depreciation Lease cost 25 38 63 15 25 40 Salaries 15 25 40 Total costs $595 $1,828 $ 172 $2,423 $ 277 Operating profit $105 The company uses the following performance report for management evaluation. DOWNTONN DOUG'S Net Income for the Year ($000) Actual Results Over- or (Under-) Budget $(900) Actual Results Delicatessen $ 800 Total Budget $2,700 Restaurant Sales revenue $1,000 $1,800 Costa Purchases 465 400 865 1,485 $(620) Hourly wages Franchise fee Advertising Utilities Depreciation Lease cont 40 350 390 472 (82) 24 30 54 61 (7) 50 100 150 150 53 50…
Professional Labor Cost Budget Day & Spieth, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending March 31, 20Y6: Billable Hours Audit Department: Staff 28,200 Partners 4,200 Tax Department: Staff 20,600 Partners 2,600 Small Business Accounting Department: Staff 3,400 Partners 500 Assume that the average compensation per hour for staff is $65 and for partners is $160. Prepare a professional labor cost budget for Day & Spieth, CPAs, for the year ending March 31, 20Y6. Enter all amounts as positive numbers. DAY & SPIETH, CPAs Professional Labor Cost Budget For the Year Ending March 31, 20Y6 Staff Partners Audit Department Hours fill in the blank 1 fill in the blank 2 Tax Department Hours fill in the blank 3 fill in the blank 4 Small Business Accounting…
Akagera Finance Plc has two service departments, the Human Resources (HR) Department and the Computing Department. Akagera Finance Plc has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows: User of Service Provider of Service HR Computing HR 0 10% Computing 10% 0 Deposit 55% 50% Loan 35% 40% The budgeted costs in the two service departments for the year are as follows: HR $ 529,000 Computing 758,500 Required: Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments