Required information [The following information applies to the questions displayed below.] Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control. Job MP-47: Machine-hours Labor-hours Job MP-48: Direct Costs $ 138,600 Machine-hours Labor-hours 106,200 45,600 85,200 Fabricating 32 82 30 90 Repair Assume that both Fabricating and Finishing work on just two jobs during the month of March: MP-47 and MP-48. Costs are allocate obs based on labor-hours in Fabricating and machine-hours in Finishing. The number of labor-hours and machine-hours worked in each department are as follows: 0 0.8 Finishing 80 10 57 27 Proportion of Services Used by Quality Control 0.2 0 Fabricating Finishing 0.5 0.1 0.3 0.1 Required: How much of the service department costs allocated to Fabricating and Finishing using the direct method should be allocated to MP-47? How much should be allocated to Job MP-48? ther intermediate calculations Pound final enswers to the

Required information [The following information applies to the questions displayed below.] Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control. Job MP-47: Machine-hours Labor-hours Job MP-48: Direct Costs $ 138,600 Machine-hours Labor-hours 106,200 45,600 85,200 Fabricating 32 82 30 90 Repair Assume that both Fabricating and Finishing work on just two jobs during the month of March: MP-47 and MP-48. Costs are allocate obs based on labor-hours in Fabricating and machine-hours in Finishing. The number of labor-hours and machine-hours worked in each department are as follows: 0 0.8 Finishing 80 10 57 27 Proportion of Services Used by Quality Control 0.2 0 Fabricating Finishing 0.5 0.1 0.3 0.1 Required: How much of the service department costs allocated to Fabricating and Finishing using the direct method should be allocated to MP-47? How much should be allocated to Job MP-48? ther intermediate calculations Pound final enswers to the

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 8E

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Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.
A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
Support department cost allocation Hooligan Adventure Supply produces and sells various outdoor equipment. The Molding and Assembly production departments are supported by the Personnel and Maintenance departments. Personnel costs are allocated to the production departments based on the number of employees, and Maintenance costs are allocated based on number of service calls. Information about these departments is detailed in the following table: Instructions 1. Assuming that Hooligan Adventure Supply uses the sequential method to allocate its support department costs, which support department does it most likely allocate first? 2. Based on your response in part (1), determine the total costs allocated from each support department to each production department using the sequential method. 3. If Hooligan Adventure Supply wanted to use a more accurate support department cost allocation method, which method should it choose? What might discourage the company from using this method?
Journalizing the distribution of service department costs to production departments Required: Using your solution to P4-7, prepare journal entries for the following: The distribution of the total factory overhead of $79,400 to the individual production and service departments where it originated. The distribution of the Building Maintenance overhead to the appropriate other departments. The distribution of the Factory Office overhead to the appropriate other departments.
Crystal Scarves Co. produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table: Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department.
Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Sanjay Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Assembly and the other for Painting.) 2. Allocate the support department costs to the producing departments by using the direct method.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Instructions Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and Finishing departments, respectively. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Determine the total and per-unit cost assigned to each product under activity-based costing. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Instructions 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department. 2. Determine the product factory overhead costs, using the multiple production department rates in (1).
Aero Aluminum Inc. uses a process cost system. The records for May show the following information: Required: Prepare a cost of production summary for each department. (Hint: When preparing the Converting production summary, refer to the Rolling production summary for the costs transferred in during the month.)
Support department cost allocation comparison Refer to your answers to Exercises 7-9. Compare the total support department costs allocated to each production department under each cost allocation method. Which production department isallocated the most support department costs (a) under the direct method, (b) under the sequentialmethod, and (c) under the reciprocal services method? EX 19-7 Support department cost allocationdirect 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: Allocate the support department costs to the production departments using the direct method. EX 19-8 Support department cost allocationsequential method Refer to the information provided for Becker Tabletops in Exercise 7. Allocate the support department costs to the production departments using the sequential method. Allocate the support department with the highest department cost first. EX 19-9 Support department cost allocation reciprocal services method Refer to the information provided for Becker Tabletops in Exercise 7. Allocate the support department costs to the production departments using the reciprocal services method.
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs $ 140, 600 98, 200 42,000 78,400 Required Required A B From: Required: Use the step method to allocate the service costs, using the following: Service department costs Quality control Repair Total costs allocated Proportion of Services Used by Quality Repair Control FabricatingFinishing a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). 0 0.3 Complete this question by entering your answers in the tabs below. Quality Control 0.3 0 Use the step method to allocate the service costs, using the following: The allocations are made in the reverse order (starting with Quality…