Renats Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows.Employees Square Feet Asset values$ 18,3584,148DepartmentMaterialsPersonalManufacturingPackagingTotalSupervision expencesDepartmentMaterialsPersonnelManufacturingPackagingTotalsUtilitiecThe four departments share the following Indirect expenses for supervision, utilities, and insurance according to their allocation bases.Indirect ExpenseCostAllocation BaseSupervisionutilities$82,880 Number of employees59,888 Square feet occupied27,880 Asset values$ 168,000InsuranceTotalDepartmentMaterialsPersonnelManufacturingPackagingAllocate each of the three Indirect expenses to the four departments.Totals58IncuranceDepartmentMaterialsPersonnelManufacturingPackaging87064Totals66,5009,50095,00019,808198,800Allocation Base38,64815,878$ 69,000Allocation BateAllocation BasePercent of Allocation BacaNumerator Denominator of TotalPercent of Allocation BacaNumerator Denominato % of TotalPercent of Allocation BacaNumerator Denominato % of TotalCost to be Allocated Allocated CoctCost to be Allocated Allocated CoctCost to be Allocated Allocated Coct

Cost allocation is the method using which the costs incurred as a whole on different activities can…

Renats Company has four departments: Materials, Personnel, Manufacturing, and Packaging Information follows. Exployees Square Foot Asset values 58 Department Person Supervision expenses Department Materials Personnal Total The four departments share the following Indirect expenses for supervision, utilities, and insurance according to their allocation bases Manufacturing Packaging Ubites Department Supervision utilities Total Allocate each of the three indirect expenses to the four departments Personal Manding Packaging 54 Insurance Department Materials Personal Manufacturing Packaging Totais 9,500 95,000 19,000 100,000 $82,000 Number of employees 50,000 square foot occupied $18,000 $10,0 4,140 38,640 15,870 Allocation Base Allocation Base Allocation Base Percent of Allocation Base Numerator Denominator% of Total Percent of Allocation Base Numerator Denominato % of Total Percent of Allocation Base Numerator Denominator of Total Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost

Renats Company has four departments: Materials, Personnel, Manufacturing, and Packaging Information follows. Exployees Square Foot Asset values 58 Department Person Supervision expenses Department Materials Personnal Total The four departments share the following Indirect expenses for supervision, utilities, and insurance according to their allocation bases Manufacturing Packaging Ubites Department Supervision utilities Total Allocate each of the three indirect expenses to the four departments Personal Manding Packaging 54 Insurance Department Materials Personal Manufacturing Packaging Totais 9,500 95,000 19,000 100,000 $82,000 Number of employees 50,000 square foot occupied $18,000 $10,0 4,140 38,640 15,870 Allocation Base Allocation Base Allocation Base Percent of Allocation Base Numerator Denominator% of Total Percent of Allocation Base Numerator Denominato % of Total Percent of Allocation Base Numerator Denominator of Total Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost

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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Compton Information Services, Inc., has two service departments: human resources and billing. Compton's operating departmen organized according to the special industry each department serves, are health care, retail, and legal services. The billing depart supports only the three operating departments, but the human resources department supports all operating departments and th billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Billing Human Resources 10 $720,000 $1,428,000 $6,000,000 Department Req A2 Health Care Retail Legal Services Total Complete this question by entering your answers in the tabs below. Req B1 *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Compton adopts the step method. The company the number of employees as the base for allocating human resources department costs and department annual revenue as…
Tenet Engineering, Incorporated operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred: Computer services (85% fixed) Building occupancy Personnel costs Total common costs $ 268,000 658,000 108,000 $ 1,034,000 The following information is available concerning various activity measures and service usages by each of the divisions: Area occupied (square feet) Payroll Computer time (hours) Computer storage (megabytes) Equipment value Operating profit (pre-allocations) Division A 25, 200 $ 453,000 320 5,400 $ 296,000 $ 735,000 Division B 50,400 $ 253,000 340 0 $ 346,000 $ 675,000 If common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division B? Note: Do not round intermediate calculations.
Support department cost allocation-reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: Maintenance Department 800 $2,000 $29,520 Production departments' total costs Feedback Security Department Machine hours 2,000 Asset value $1,400 Department cost $13,120 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. Cutting Department Cutting Department X Sewing Department X Sewing Department 6,400 $3,000 $66,000 11,600 $5,000 $85,000 ▼ Check My Work The reciprocal services method considers all inter-support-department…
Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResources GeneralFactory Fabricating Assembly Direct costs $165,000 $380,000 $114,200 $90,000 Normal activity: Number of employees — 40 70 150 Square footage 1,800 — 5,500 13,200 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded…
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.
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The following is a partially completed departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for its four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Fabrication. Operating costs No. of purchase orders Sq. ft. of space Multiple Choice O $6,400. $9,900. $8,100. $9,000. $25,600. Purchasing Maintenance Fabrication Assembly $32,000 $18,000 $96,000 16 3,300 $62,000 4 2,700
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Solomon Information Services, Incorporated, has two service departments: human resources and billing. Solomon's operating departments, organized according to the special Industry each department serves, are health care, retall, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost* Annual revenue Req A1 Department Human Resources Billing Health Care Retail Req A2 Legal Services Total 20 $ 900,000 Complete this question by entering your answers in the tabs below. Allocation Rate Req B1 *This is the operating cost before allocating service department costs. Required a. Allocate service department costs to operating departments, assuming that Solomon adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and department…
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Solomon Information Services, Incorporated, has two service departments: human resources and billing. Solomon's operating departments, organized according to the special Industry each department serves, are health care, retall, and legal services. The billing department supports only the three operating departments, but the human resources department supports all operating departments and the billing department. Other relevant information follows. Number of employees Annual cost Annual revenue Req A1 Human Resources Department Reg A2 Billing Health Care Retail Legal Services Total *This is the operating cost before allocating service department costs. Allocation Rate 20 Req B1 $ 900,000 Complete this question by entering your answers in the tabs below. x X Billing Required a. Allocate service department costs to operating departments, assuming that Solomon adopts the step method. The company uses the number of employees as the base for allocating human resources department costs and…