Jane's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 15,000 calls and incurred costs of $350,000. Of these calls, 1,800 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the wholesale operation are

Jane's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 15,000 calls and incurred costs of $350,000. Of these calls, 1,800 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the wholesale operation are

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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XYZ Company's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 7,000 calls and in calls were for the company's marketing division (the remainder were for the retail division), costs allocated to the retail division should amount to: Select one: O a $0. Ob. $85,260. Oc $117,740. Od. $29. O e. $203.000.
Buster customer service department follows up on customer complaints by telephone inquiry. Last quarter the department initiated 15,200 calls and incurred costs of $357,200. Of these calls, 4,230 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are: Multiple Choice $99,405.
ervice Department Charges The centralized computer technology department of Hardy Company has expenses of $372,600. The department has provided a total of 13,800 hours of service for the period. The Retail Division has used 6,762 hours of computer technology service during the period, and the Commercial Division has used 7,038 hours of computer technology service. How much should each division be charged for computer technology department services? Do not round interim calculations. Retail Division $fill in the blank 1 Commercial Division $fill in the blank 2
The centralized computer technology department of Hardy Company has expenses of $61,600. The department has provided a total of 7,700 hours of service for the period. The Retail Division has used 6,083 hours of computer technology service during the period, and the Commercial Division has used 1,617 hours of computer technology service. How much should each division be allocated for computer technology department services? Do not round interim calculations. Retail Division $fill in the blank 1 Commercial Division
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs IT HR Total IT $ 0 16 $ 152,000 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. HR 1,525 0 $ 247,950 152,000 Answer is not complete. Cost Allocation To: IT HR 152,000 $ 247,950 Publishing 2,440 24 $ 431,000 $ 247,950 Publishing $ Binding 2,135 40 $ 392,500 0 Binding 0
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 $360,000 8,100 Westside 6,250 $ 240,000 2,700 $ 99,000 $ 108,000 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? Required A Required B Complete this question by entering your answers in the tabs below. Predetermined overhead rate Total 31,250 $ 600,000 10,800 $ 207,000 $360,000 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. Note: Round your answer to 2…
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
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.
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs HR Total $ IT 0 20 $ 156,800 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. IT HR 1,585 0 $ 249,030 0 $ Publishing 2,536 30 $ 433,400 Cost Allocation To: HR 0 Publishing LA Binding 2,219 50 $ 398,500 0 $ Binding 0
The centralized computer technology department of Lee Company has expenses of$264,000. The department has provided a total of 2,500 hours of service for the period. TheRetail Division has used 1,125 hours of computer technology service during the period, andthe Commercial Division has used 1,375 hours of computer technology service. How mucheach division should be charged for computer technology department services?
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs. IT HR 0 16 1,525 0 Publishing 2,440 24 $ 152,000 $ 247,950 $ 431,000 Binding 2,135 40 $ 392,500 Woodstock Binding estimates that the variable costs in the IT Department total $112,500, and in the HR Department variable costs to $142,500. Avoidable fixed costs in the IT Department are $18,250. Required: If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. × Answer is complete but not entirely correct. Maximum…
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs Required: IT HR 0 27 1,400 0 Publishing 1,400 35 Binding 4,200 51 $ 151,000 $ 247,500 $ 430,000 $390,000 Use the direct method to allocate these service department costs to the operating departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round "Publishing" and "Binding" answers to 2 decimal places. Service department costs IT allocation IT HR Publishing Binding HR allocation Total costs allocated S 0 $ 0 S 0.00 5 0.00