Exercise 11-33 (Algo) Cost Allocation: Direct Method (LO 11-1)Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (Westand East). The usage data for each of the service departments for the previous period follow:ITAccountingHRIT8%10%The direct costs of the service departments in the previous period were $91,750 for IT, $119,000 for Accounting, and $162,500 for HR.HR allocationTotal costs allocatedAccounting HR West East81%40%20%40%0%40%60%10%60%20%Required:Use the direct method to allocate the service department costs to the production departments.Note: Amounts to be deducted should be indicated by a minus sign. Do not round Intermediate calculations.Service department costsIT allocationAccounting allocationITAccountingHRWestEast

Lets understand the basics.Service department cost can be allocated using,(1) Direct method(2) Step down method(3) Reciprocal methodIn direct method, service department cost gets allocated directly to production department. In this method, service department costs are not allocated to another service department.So here in this case, ITAccounting HRWestEastService department costs91,750119,000162,500IT allocation (40:40)-91,75045,87545,875Accounting (40:60)-119,00047,60071,400HR (60:20)-162,500121,87540,625Total000215,350157,900Therefore, ITAccounting HRWestEastService department costs91,750119,000162,500IT allocation (40:40)-91,75045,87545,875Accounting (40:60)-119,00047,60071,400HR (60:20)-162,500121,87540,625Total000215,350157,900

Business

Accounting

Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT IT 0% 10% Accounting 0% 10% HR 20% ex IT West East 40% 40% 60% Accounting HR The direct costs of the service departments in the previous period were $91,750 for IT, $119,000 for Accounting, and $162,500 for HR. Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round Intermediate calculations. 40% 60% 20% Accounting HR West East

Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT IT 0% 10% Accounting 0% 10% HR 20% ex IT West East 40% 40% 60% Accounting HR The direct costs of the service departments in the previous period were $91,750 for IT, $119,000 for Accounting, and $162,500 for HR. Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round Intermediate calculations. 40% 60% 20% Accounting HR West East

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

Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Square Feet Asset Values Employees Materials 26 30,000 $ 9,300 Personnel 13 12,000 2,480 Manufacturing Packaging 52 66,000 37,820 39 12,000 12,400 Total 130 120,000 $ 62,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 82,700 Number of employees Allocation Base 52,000 Square feet occupied 23,500 Asset values $ 158,200 Allocate each of the three indirect expenses to the four departments.
Karen Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Allocation Base $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Cost Supervision Utilities Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet 66,500 9,500 95,000 19,000 Asset Values 58 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 70 64 Total 200 190,000 $69,000 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a summary table that reports…
Mervon Company has two operating departments: mixing and bottling. Mixing occupies 26,640 square feet. Bottling occupies 17,760 square feet. Indirect factory costs include maintenance costs of $210,000. If the maintenance costs are allocated to operating departments based on square footage occupied, determine the amount of maintenance costs allocated to each operating department. Department Mixing Bottling Total Sq. Feet % of Total Maint. Exp. to Allocate Allocated Amount
8. Lisa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Personnel Dept. Production Dept. A Production Dept. B Standard service hours used 200 200 240 160 Number of employees 10 20 40 120 How much of the cost of the Maintenance Department is allocated to Department B using the direct method? Select one: a. $60,000 b. $32,000 c. $12,800 d. $24,000 e. $16,000
Subject :- Accounting
Cheyenne's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $271000, $158300, and $68800, respectively. Information on the hours used are as follows: Hours in Acct Hours in Admin Hours in HR Acct O $0. O $91022. O $87397. O $96079. 16 8 Admin 20 4 HR 48 8 Surgery 360 120 65 ER 220 80 130 What are the total costs allocated from the HR department to the operating units? (Round intermediate calculations to 2 decimal places, e.g. 52.75.)
Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: Operating Department Service Department Physical General Sales Management $ 33,384 $ 68,070 Plant After-Sales $ 232,830 Departmental costs Employee time Space occupied $ 292,500 33,000 6,000 5,000 40,000 10,000 5,000 40,000 28,000 General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the basis of space occupied. The total After-Sales Department cost after allocations is closest to: Multiple Choice $321,410 $332,888 $335,534 $335,670
Merlin Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $25,000 4,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters Required: a. How much of the correspondence costs will be assigned to Department B? b. How much of the total costs will be assigned to Department A?
Pronghorn's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $258900, $147700, and $70800, respectively. Information on the hours used are as follows: Acct Admin HR Surgery ER Hours in Acct 20 48 360 220 Hours in Admin 16 8 120 80 Hours in HR 8 4 65 130 What are the total costs allocated from the accounting department to the operating units? (Do not round the intermediate calculations.) O $0. O $275878. O $273926. O $264975.
Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Supervision Utilities Insurance Total Cost $ 83,100 Number of employees 56,000 square feet occupied 25,500 Value of assets in use $164,600 Allocation Base Departmental data for the company's recent reporting period follow. Department Materials Square Feet Asset Values 32,000 $13,200 16,000 1,980 88,000 34,980 Personnel Manufacturing Packaging Total 24,000 15,840 160,000 $66,000 Employees 34 17 68 51 170 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. OL Prev 1 of 3 - --- ‒‒‒ H Next > O
Uramilaben
The following department data are available: Total materials costs $216,000 Equivalent units of materials 20,000 Total conversion costs $126,000 Equivalent units of conversion costs 10,000 What is the total manufacturing cost per unit?