Premium Company provides the following ABC costinginformation:ActivitiesCostsAccount inquiry$200,000Account billing$140,000Activity-cost drivers25,000Account verification accounts$75,000Correspondence lettersTotal costsA4,000,000 lines10,000 hours40,000 accountsDepartment BAccount inquiry hourshoursAccount billing lines250,000 linesSelect one:4,000 lettersThe above activities are used by Departments A and Bas follows:4,000 hoursAccount verification accountsaccounts8,000 accountsCorrespondence lettersa. $8,750b. $8,500c. $8,250d. $8,5401,600 lettersTotal$Documents$440,000Department2,50010,000lettersHow much of the account billing cost will be assigned toDepartment B400,000 lines1,200

Cost allocation is used in analyzing or identifying the process to assign the cost to people, and…

Premium Company provides the following ABC costing information: Activities Costs Account inquiry $200,000 Account billing $140,000 Activity-cost drivers 25,000 Account verification accounts $75,000 Total costs 4,000,000 lines Correspondence letters 10,000 hours Account billing lines 250,000 lines 40,000 accounts A Department B Account inquiry hours hours Select one: 4,000 letters The above activities are used by Departments A and B as follows: 4,000 hours Account verification accounts accounts 8,000 accounts Correspondence letters a. $8,750 1,600 letters b. $8,500 c. $8,250 d. $8,540 Total $ Documents $440,000 letters How much of the account billing cost will be assigned to Department B Department 2,500 10,000 400,000 lines 1,200

Premium Company provides the following ABC costing information: Activities Costs Account inquiry $200,000 Account billing $140,000 Activity-cost drivers 25,000 Account verification accounts $75,000 Total costs 4,000,000 lines Correspondence letters 10,000 hours Account billing lines 250,000 lines 40,000 accounts A Department B Account inquiry hours hours Select one: 4,000 letters The above activities are used by Departments A and B as follows: 4,000 hours Account verification accounts accounts 8,000 accounts Correspondence letters a. $8,750 1,600 letters b. $8,500 c. $8,250 d. $8,540 Total $ Documents $440,000 letters How much of the account billing cost will be assigned to Department B Department 2,500 10,000 400,000 lines 1,200

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

ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made Accounting 500,000 number of invoices processed Personnel 400,000 number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 The operating income of the Micro Division after all support department allocations will be Oa. $610,000 Ob. $650,000 Oc. $345,000 Od. $305,000
Sterling Archer Spy Agency provides independent intelligence gathering services. The agency has the following data concerning its overhead costs and its activity-based costing system: Overhead costs: Wages and salaries $400,000 Administrative expenses 150,000 Total $550,000 Distribution of resource consumption: Activity Cost Pools Intelligence Report procurement Writeups Other Total Wages and salaries 70% 25% 5% 100% Administrative expenses…
Support department cost allocation-sequential method Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Support Department Cost Driver Square footage to be serviced Janitorial Department Cafeteria Department Number of employees Janitorial Department Cafeteria Department Department costs $310,000 $169,000 Square feet Number of employees 50 10 5,000 3 Cutting Department $1,504,000 1,000 Assembly Department $680,000 4,000 30 10 Allocate the support department costs to the production departments using the sequential method. Allocate the support department with the highest department cost first. Janitorial Department Cafeteria Department $ Cutting Department Assembly Department
Active Customer Services Ltd uses a traditional activity-based costing system to assign £900,000 of committed resource costs for customer service on the basis of the following information gathered from interviews with customer service personnel: BMAN21040 ACTIVITY Process sales orderProcess customer complaints Perform customer credit checks Required: TIME ESTIMATED COST DRIVER PERCENTAGE QUANTITY 55% 15,500 customer orders 15% 300 customer complaints 30% 2,000 credit checks 100% a) Compute the activity cost driver rates using this system.
The following departmental information is for the four departments at Samoa Industries. Departmental Total Cost Cost Driver Square Feet Number of Employees Janitorial $150,000 Square footage serviced 200 40 Cafeteria 50,000 Number of employees 20,000 12 Cutting 1,125,000 4,000 120 Assembly 1,100,000 16,000 40 The Janitorial and Cafeteria departments are support departments. Samoa uses the sequential method to allocate support department costs, first allocating the costs from the Janitorial Department to the Cafeteria, Cutting, and Assembly departments. Question Content Area 1. Determine the dollar amount of the Janitorial Department costs to be allocated to the (a) Cafeteria, (b) Cutting, and (c) Assembly departments. Department Amount a. Cafeteria Department fill in the blank 1 of 3$ b. Cutting Department fill in the blank 2 of 3$ c. Assembly Department fill in the blank 3 of 3$…
Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville, Atlanta, and Louisville. Two of the company's activity cost pools are Administrative Service and Development Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: Activity Cost Pool Activity Measure Estimated Cost Administrative service % of time devoted to branch $ 1,680,000 Development service Computer time $ 630,000 Estimated branch data for next year is as follows: Time to branch Computer time Nashville 70 % 1,600,000 minutes Atlanta 20 % 1,200,000 minutes Louisville 10 % 400,000 minutes Total 100 % 3,200,000 minutes How much of the headquarters cost allocation should Nashville expect to receive next year?
Dog's Company provides the following ABC costing information: Activities Total Costs Activity - cost drivers Labor $320,000 8,000 hours Gas $36, 000 6,000 gallons Invoices $ 40,000 2,500 invoices Total costs $396,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,200 hours 4, 300 hours Gas 1,700 gallons 800 gallons 3,500 gallons Invoices 1,600 invoices 400 invoices 500 invoices How much of the total costs will be assigned to the Lawn Department? Group of answer choices $134,500 $134, 600 $135,800 $135, 600
Morrell Financial Services (MFS) has three service departments: Accounting, Information Technology (IT), and Personnel. MFS also has two operating departments (Advice and Brokerage). Data on service department usage and service direct costs follow: Accounting IT Personnel Direct cost Using Department Accounting IT Personnel Advice 0% 16% 6% 23% 31% Brokerage 40% 0% 10% 29% 45% 11% 13% 0% 39% 37% $ 197,000 $ 281,000 $ 264,500 NA NA* *Not applicable for this problem. Required: Assume that Morrell Financial Services uses the reciprocal method of service department cost allocation. What is the total service department cost allocated to Advice? To Brokerage? (Hint: Use the reciprocal method spreadsheet shown in Exhibit 11.22 as a start to your analysis.) Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollars. Advice Brokerage Cost Allocated
Assume a company's activity-based costing system Includes three activitles with the following activity rates: Activity Cost Pool Activity Rate $ 2 per mile driven $ 50 per delivery $ 22 per phone call Travel Deliveries Customer service Two of the company's many customers Include Customer A and Customer B. These two customers consumed the company's activitles as follows: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) Customer service (number of phone calls) 15 5 20 12 How much total activity cost would be assigned to Customer A from the company's three activitles? Multiple Choice $1,680 $1,980 $1,790 $1,690
Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded: Supplying Department Using Department Human Resources Legal Human Resources 0 10% 10% $ 264,500 Legal Testing Direct cost Costs Human resources Legal Testing Total Testing Global 15% 0 0 Domestic 10% 0 0 Global 25% 30% 45% 50% Required: Allocate the service department costs to the two operating departments using the reciprocal method. Note: Do not round intermediate calculations. From Allocated to: Domestic 60% 45% $ 190,000 $90,000 $538,000 $ 487,000
Premium Company provides the following ABC costing information: Activities Costs Account inquiry $200,000 Account billing $140,000 Activity-cost drivers 25,000 Account verification accounts $75,000 Total costs 4,000,000 lines Correspondence letters 10,000 hours 40,000 accounts Account billing lines 250,000 lines Department B Account inquiry hours hours Select one: 4,000 letters The above activities are used by Departments A and B as follows: 4,000 hours Account verification accounts accounts 8,000 accounts Correspondence letters a. $8,750 b. $8,500 c. $8,250 d. $8,540 Total 1,600 letters $440,000 Department 2,500 10,000 400,000 lines letters How much of the account billing cost will be assigned to Department B 1,200
ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made Accounting 500,000 number of invoices processed Personnel 400,000 number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 The support department cost that will be allocated to the Macro Division is a.$175,000 b.$130,000 c.$305,000 d.$405,000