Mailings Review View Help Ao AaBbCcD AaBbCcDc AaBbC AaBbC A - ==E-|2- T Normal TNo Spac.. Heading 1 Heading Paragraph Styles 1. 2. 6 . %23 Johnson Company produced chemical producds. Janitorial and maintenance support department costs are allocated to the mixing and blending production departments based on square footage (janitorial) and machine hours (maintenance), respectively. Relevant department data is as follows: Janitorial Maintenance Mixing Blending Department Cost $18,000 $12,000 $52,000 $63,000 Square footage 1,000 3,000 Machine Hours 500 1,000 Using the direct method of support department cost allocation, determine the total cost of the Mixing and Blending departments after allocating all support costs to the production departments. Joint Cost Allocation Anderson Company makes three types of paint products: base, primer and paint. All products go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer is two times longer than for base, and the mixing process for paint is three times longer than for base. 1. Allocate the joint cost of production of $10,000 to each product using the veighted average method. 2. Assuming the market price at the split of point for base is 53 per galon, primer is 54 per gallon and paint is 58 per gallon, use the market value at split-off to allocate thne $10,000 of joint production costs. 3. Analyze the differences in the methoos used in #1 and #2 above. Wnat are the reasons for the difference? When would each method be most appropriate to use?
Mailings Review View Help Ao AaBbCcD AaBbCcDc AaBbC AaBbC A - ==E-|2- T Normal TNo Spac.. Heading 1 Heading Paragraph Styles 1. 2. 6 . %23 Johnson Company produced chemical producds. Janitorial and maintenance support department costs are allocated to the mixing and blending production departments based on square footage (janitorial) and machine hours (maintenance), respectively. Relevant department data is as follows: Janitorial Maintenance Mixing Blending Department Cost $18,000 $12,000 $52,000 $63,000 Square footage 1,000 3,000 Machine Hours 500 1,000 Using the direct method of support department cost allocation, determine the total cost of the Mixing and Blending departments after allocating all support costs to the production departments. Joint Cost Allocation Anderson Company makes three types of paint products: base, primer and paint. All products go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer is two times longer than for base, and the mixing process for paint is three times longer than for base. 1. Allocate the joint cost of production of $10,000 to each product using the veighted average method. 2. Assuming the market price at the split of point for base is 53 per galon, primer is 54 per gallon and paint is 58 per gallon, use the market value at split-off to allocate thne $10,000 of joint production costs. 3. Analyze the differences in the methoos used in #1 and #2 above. Wnat are the reasons for the difference? When would each method be most appropriate to use?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Mailings
Review
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Help
Ao
AaBbCcD AaBbCcDc AaBbC AaBbC
A -
==E-|2-
T Normal TNo Spac.. Heading 1
Heading
Paragraph
Styles
1.
2.
6 .
%23
Johnson Company produced chemical producds. Janitorial and maintenance support
department costs are allocated to the mixing and blending production departments based on
square footage (janitorial) and machine hours (maintenance), respectively. Relevant
department data is as follows:
Janitorial
Maintenance
Mixing
Blending
Department Cost
$18,000
$12,000
$52,000
$63,000
Square footage
1,000
3,000
Machine Hours
500
1,000
Using the direct method of support department cost allocation, determine the total cost of the
Mixing and Blending departments after allocating all support costs to the production
departments.
Joint Cost Allocation
Anderson Company makes three types of paint products: base, primer and paint. All products
go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer
and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer
is two times longer than for base, and the mixing process for paint is three times longer than for
base.
1. Allocate the joint cost of production of $10,000 to each product using the veighted
average method.
2. Assuming the market price at the split of point for base is 53 per galon, primer is 54 per
gallon and paint is 58 per gallon, use the market value at split-off to allocate thne $10,000
of joint production costs.
3. Analyze the differences in the methoos used in #1 and #2 above. Wnat are the reasons
for the difference? When would each method be most appropriate to use?
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