Palace Company has two service departments and two user departments. The number of employees in each department is: Personnel Cafeteria 25 Producing Department A Producing Department B 067 The fixed costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $96,280 during a given period, the amount of cost allocated to the Cafeteria under the step method would be: Multiple Choice

Palace Company has two service departments and two user departments. The number of employees in each department is: Personnel Cafeteria 25 Producing Department A Producing Department B 067 The fixed costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $96,280 during a given period, the amount of cost allocated to the Cafeteria under the step method would be: Multiple Choice

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company identified the following partial list of activities, costs, and activity drivers expected for the next year: Budgeted Costs $ 83,600 $ 8,800 $ 40,500 Activity Extrusion costs Handling costs Packaging costs Production volume Batches made Orders filled Product A 750,000 units 200 batches 75 Cost Driver Number batches made Number of orders filled Number of units made Product B 600,000 units 750 batches 200 Calculate activity rates for each of the three activities using activity-based costing (ABC). 4
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Marigold Company has two production departments, Fabricating and Assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain total budgeted costs. A separate graph based on direct labor hours is used for each department. The graphs show the following. 1. 2. (a) $ $ At zero direct labor hours, the total budgeted cost line and the fixed-cost line intersect the vertical axis at $47,000 in the Fabricating Department and $37,600 in the Assembling Department. State the total budgeted cost equation for each department. (Round cost per direct labor hour to 2 decimal places, e.g. 1.25.) (b). At normal capacity of 47,000 direct labor hours, the line drawn from the total budgeted cost line intersects the vertical axis at $159,800 in the Fabricating Department and $112,800 in the Assembling Department. Your answer is correct. 47,000 total Fixed Costs 37,600 total Fixed Costs eTextbook and Media The total budgeted cost Fabricating Department + Variable Costs…
Pre-Fabricators Inc manufacturers and assembles prefabricated concrete and green heart homes for the lower to middle income housing market. There are three support departments and two production departments. The budgeted costs and the normal activity levels for each department are given below. Support Departments Production Departments Design and Personnel Fabrication & assembly Installation Concrete Green Heart Overhead costs $150,000 $3,00,000 $1,820,000 Square feet 200 3600 2,400 60,000 72,000 Number of employees 3 11 6 18 14 Material Cost $45,000 $450,000 $720,000 2,000,000 $1,800,000 Homes (estimated production) 40 60 Prime manufacturing cost per home $78,000 $62,500 The allocation bases are as follows: Design – Number of Employees, Fabrication –Square feet and Installation – Material costs. The production department allocates overhear cost to each case based on the budgeted cases…
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Question 2. A company manufactures two products, X and Y, for which the following information is available Particulars Budgeted production (units) Product X 4,000 Product Y 6,000 Labour hours per unit 5 8 Number of production runs required 4 6 Number of inspections during production 3 2 Production set-up costs OMR 350,000 Inspection costs OMR 150,000 Total overhead costs OMR 500,000 Using Activity Based Costing, calculate the budgeted overhead cost per unit for Product X and Product Y.