Requirement 1c. Allocate the two support departments' costs to the two operating departments using the step-down method (Allocate IS first). (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Support Departments Operating Departments Step-down Method AS IS GOVT CORP Total Budgeted overhead costs $ 690,000 $2,100,000 $8,675,000 $12,490,000 $23,955,000 before interdepartment cost allocations Allocation of IS costs 756,000 1,134,000 (2,100,000) $ 0 Allocation of AS costs $ $23,955,000 Total budgeted overhead of operating departments 0

Requirement 1c. Allocate the two support departments' costs to the two operating departments using the step-down method (Allocate IS first). (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Support Departments Operating Departments Step-down Method AS IS GOVT CORP Total Budgeted overhead costs $ 690,000 $2,100,000 $8,675,000 $12,490,000 $23,955,000 before interdepartment cost allocations Allocation of IS costs 756,000 1,134,000 (2,100,000) $ 0 Allocation of AS costs $ $23,955,000 Total budgeted overhead of operating departments 0

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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Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 53,750 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance $ 295,625 53,750 $ 349,375 Actual Results 50,000 $ 354,500 Exercise 21-17 (Algo) Computing standard overhead rate and total overhead variance LO P4 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,875 DLH, computed as 53,750 units x 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. (Indicate the effect of the variance by selecting…
Bike-O-Rama produces two bike models: Voltage and EasyRider. Departmental overhead data follow. Department Fabricating Assembly Budgeted Cost $ 134,400 124,000 Allocation Base Machine hours (MH) Direct labor hours (DLH) Budgeted Usage 9,600 MH 3,100 DLH Required: 1. Compute departmental overhead rates using (a) machine hours to allocate budgeted Fabricating costs and (b) direct labor hours to allocate budgeted Assembly costs. 2. The company reports the following actual production usage data. Compute the overhead cost per unit for each model. Voltage 2.0 MH 1.8 DLH Machine hours per unit Direct labor hours per unit 3. The company reports additional information below. For each model, compute the product cost per unit. Selling Price $ 276 170 Per Unit Direct Labor Voltage EasyRider Direct Materials. $ 106 96 $45 18 4. For each model, compute gross profit per unit (selling price per unit minus product cost per unit). EasyRider 3.0 MH 0.5 DLH Complete this question by entering your answers…
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1. Compare and explain differences in the support-department costs allocated to eachproduction department. 2. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?
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Reciprocal Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Support Departments Producing Departments GeneralFactory Receiving Assembly Finishing Direct overhead $400,000 $160,000 $43,000 $74,000 Square footage — 2,700 5,400 5,400 Number of receiving orders 300 — 1,680 1,020 Direct labor hours — — 25,000 40,000 Required: 1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. (Round allocation ratios to two decimal places. Round allocated costs to the nearest dollar. If an amount is zero, enter "0".) Allocation ratios: General Factory Receiving Assembly Finishing Square footage Number of receiving orders Allocations: General Factory Receiving Assembly Finishing Direct overhead cost $ $ $ $ General Factory Receiving Total $ $ $ $ 2. Using direct labor…
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