Isakson Corporation had the following activities, traceable costs, and physical flow of driver units: Activities Customer support (hours) Order processing (orders) Traceable Costs Physical Flow of Driver $500,000 $320,000 Payment verification (accounts) $180,000 Documentation (hours) The above activities are used Department Customer $60,000 12,500 hours 5,000,000 50,000 accounts 5,000 documents by Departments X and Y as follows: Order Payment Documentation Support Processing Verification (hours) (hours) (orders) (accounts) X 3,000 hours 500,000 12,000 accounts 1,200 orders documents Y 700,000 orders 5,000 hours documents How much of the customer support cost will be assigned to Department X? 15,000 accounts 1,800

Isakson Corporation had the following activities, traceable costs, and physical flow of driver units: Activities Customer support (hours) Order processing (orders) Traceable Costs Physical Flow of Driver $500,000 $320,000 Payment verification (accounts) $180,000 Documentation (hours) The above activities are used Department Customer $60,000 12,500 hours 5,000,000 50,000 accounts 5,000 documents by Departments X and Y as follows: Order Payment Documentation Support Processing Verification (hours) (hours) (orders) (accounts) X 3,000 hours 500,000 12,000 accounts 1,200 orders documents Y 700,000 orders 5,000 hours documents How much of the customer support cost will be assigned to Department X? 15,000 accounts 1,800

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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. Pitt Jones Company had the following activities, allocated costs, and allocation bases: Activities Account inquiry (hours) Account billing (lines) Account verification (accounts) Correspondence (letters) Allocated Costs Allocation Base $60,000 $30,000 $15,000 $10,000 2,000 hours 20,000 lines 20,000 accounts 1,000 letters The above activities are carried out at two of their regional offices. Northeast Office Midwest Office Account inquiry (hours) Account billing (lines) Account verification (accounts) Correspondence (letters) 100 hours 10,000 lines 1,000 accounts 50 letters 200 hours 7,000 lines 600 accounts 100 letters How much of the account verification costs will be assigned to the Northeast Office?
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es Berkeley Bank reports the following information about resources in two functions. Cost Driver Rate Resources used Process transactions. Process accounts Resources supplied Process transactions Process accounts $ Process transactions Process accounts $ 0.01 per transaction 250 per account $630, 000 $306, 000 Required: Compute unused resource capacity at Berkeley Bank. Unused Resource Capacity Cost Driver Volume 40,000,000 transactions 950 accounts
Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
Stoltz Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Data Processing and Personnel, and two operating departments, Assembly and Finishing. Service Department Data Processing $ 26,488 Operating Department Assembly $ 188,980 Finishing $ 506,960 Personnel $ 18,630 Departmental costs Computer workstations Employees 37 12 45 41 35 11 46 35 Data Processing Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees. The total amount of Data Processing Department cost allocated to the two operating departments is closest to: Multiple Choice $23,245 $26,488 $61,567 $16,874
Assume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Total Cost Total Activity $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) 8,000 deliveries 5,000 manual orders Electronic order processing (Number of electronic orders) 15,000 electronic orders Line item picking (Number of line items picked) Other organization-sustaining costs (None) 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Activity Measure Hospital A Hospital B Number of deliveries 12 25 Number of manual orders 30 Number of electronic orders 15 Number of line items picked 130 250 How much total activity cost should be assigned to Hospital A for internal management purposes?
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Stoltz Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Data Processing and Personnel, and two operating departments, Assembly and Finishing. Service Department Data Processing $ 54,365 Operating Department Assembly $ 314,500 Personnel Finishing $ 677,630 $ 34,560 Departmental costs Computer workstations Employees 53 35 68 63 47 30 75 60 Data Processing Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees. The total amount of Data Processing Department cost allocated to the two operating departments is closest to: Multiple Choice $54,365 $26.145 $19,200 $28,220
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $390,600 are allocated on the basis of machine hours. The Accounting Department's costs of $110,400 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $340,000 and $540,000, respectively. Maintenance Accounting A B Machine hours 875 40 2,550 240 Number of employees 2 2 8 4 What is the cost of the Accounting Department's cost allocated to Department A (rounded to the nearest whole dollar) using the step method and assuming the Maintenance Department's costs are allocated first? Multiple Choice $77,027. $73,600. $68,482. $77,281.
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively. Maintenance Accounting A B Machine hours 480 20 2,300 200 Number of employees 2 2 8 4 What is the cost of the Accounting Department's cost allocated to Department A using the step method and assuming the Maintenance Department's costs are allocated first? Note: Do not round intermediate calculations.
ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 Number of copies made Accounting 500,000 Number of invoices processed Personnel 400,000 Number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information is as follows: Revenues Direct operating expenses Number of copies made Number of invoices processed Number of employees Micro Macro Super $700,000 $850,000 $650,000 50,000 70,000 100,000 20,000 30,000 50,000 Et 700 130 800 145 500 125 The support department allocation rate for the Personnel Department is O a. $3,200 O b. $2,758 O c. $1,000 O d. $3,077