Order processing (orders) Documentation (hours) $60,000 Department Customer Order Isakson Corporation had the following activities, traceable costs, and physical flow of driver units: Activities Customer support (hours) Traceable Costs Physical Flow of Driver $500,000 $320,000 Payment verification (accounts) $180,000 12,500 hours 5,000,000 50,000 accounts 5,000 documents The above activities are used by Departments X and Y as follows: 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

Order processing (orders) Documentation (hours) $60,000 Department Customer Order Isakson Corporation had the following activities, traceable costs, and physical flow of driver units: Activities Customer support (hours) Traceable Costs Physical Flow of Driver $500,000 $320,000 Payment verification (accounts) $180,000 12,500 hours 5,000,000 50,000 accounts 5,000 documents The above activities are used by Departments X and Y as follows: 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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Hi expert please give me answer general accounting
Lewis Corporation has two service departments: Data Processing and Administration/Personnel. The company also has three divisions: X, Y, and Z. Data Processing costs are allocated based on hours of use and Administration/Personnel costs are allocated based on number of employees. Department Direct Costs Employees Hours of use Administration/ Personnel $400,000 10 3,300 Data Processing 850,000 5 1,100 X. 450,000 30 1,800 300.000 15 2,200 550.000 25 4,500 Assume that Data Processing provides more service than Administration/Personnel. Refer to Lewis Corporation. Assume that Data Processing costs have been allocated and the balance in Administration is $600,000. Using the step method, what amount is allocated to Z? Select one: a. $214,286 b. $200,000 c. $225,000 d. $112,500
Assigning Cost of Resources to Activities, Unbundling the General Ledger Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities Clerical Hours Supervision $70,000 Processing accounts 10,000 Phone and supplies 90,000 Issuing statements 5,000 Salaries 275,000 Processing transactions 7,000 Computer 25,000 Answering customer inquiries 3,000 Total $460,000 Total 25,000 Computers are used only by the issuing (30 percent) and processing transaction (70 percent) activities. Phone and supplies are 60 percent customer inquiries with the other 40 percent divided equally among the remaining activities, including supervising the checking operation. The supervisor spends 100 percent of his time on supervision. In addition to the 25,000 clerical hours, there are 2,000 hours of supervision used (the hours used by the supervising clerks activity, which is not…
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BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International. Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting domestic International Employees – 21 36 43 Transactions 32,000 – 21,000 84,000 Department direct costs 360,000 140,000 $ 935,000 $ 3,730,000 Required: a. Allocate the cost of the service departments to the operating departments using the direct method.b. Allocate the cost of the service departments to the operating departments using the step method. Start with Administration.c. Allocate the cost of the service departments to the operating departments using the reciprocal method.
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.
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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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D. ABC Company is a manufacturer of electronic parts and uses a service department charge system to charge profit centers. The following table identifies the service categories, costs and activity bases used by CCS Division. CCS Division Help desk Network center Electronic mail Local voice support Activity Base Number of calls Number of devices monitored Number of user account Number of phone extension C. d. Assumed Cost 73,600 614,250 53,550 127,238 Assumed Activity Base Quantity 2,300 calls 9,450 devices 6,300 accounts 8,775 extensions One of the profit centers for ABC Company is the Calamba Branch. Assume the following data for Calamba Branch: a. The branch has 4,000 employees of which 50% are office employees. b. All the office employees have a phone and 90% of them have a computer on the network. Ninety percent of the employees with a computer also have an email account. The average number of help desk calls for March 20X2 was .50 call per individual with a computer. e. There are…
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Problem 8 Pitt Jones Company had the following activities, allocated costs, and allocation bases: Activities Account inquiry (hours) Account billing (lines) Account verification (accounts) 15,000 Correspondence (letters) 10,000 Allocated Costs $60,000 0,000 Allocation Base 2,000 hours 20,000 liners 20,000 accounts 1,000 letters The above activities are used by departments P and Q P Department Q Account inquiry (hours) Account billing (lines) Account verification (accounts) 100 hours 10,000 lines 1,000 accounts 50 letters 200 hours 7,000 lines 600 accounts 100 letters 1) How much of the account verification costs will be assigned to Department P