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Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted fixed-cost rate and budgeted usage of Materials Management Department services by the Mishining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.)

Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted fixed-cost rate and budgeted usage of Materials Management Department services by the Mishining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.)

FINANCIAL ACCOUNTING
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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Joe Schneider, the new controller of Allied Manufacturing Company (AMC) believes that the company should use the dual rate method of allocating overhead costs of its Materials Management Department to its Machining and Assembly Departments instead of the single rate method, which the company has used since its inception 20 years ago. Schneider's Materials Management Department has an annual capacity of 5,875 labor-hours and a budgeted fixed cost of $188,000. The budgeted variable cost per labor-hour of the Materials Management Department is $16. Schneider gathers the following information: (Click the icon to view the information.) Budgeted usage of Materials Management labor-hours Actual usage of Materials Management labor-hours Machining Department 1,150 1,050 Assembly Department 2,850 3,450 Total 4,000 4,500
Transcribed Image Text:Joe Schneider, the new controller of Allied Manufacturing Company (AMC) believes that the company should use the dual rate method of allocating overhead costs of its Materials Management Department to its Machining and Assembly Departments instead of the single rate method, which the company has used since its inception 20 years ago. Schneider's Materials Management Department has an annual capacity of 5,875 labor-hours and a budgeted fixed cost of $188,000. The budgeted variable cost per labor-hour of the Materials Management Department is $16. Schneider gathers the following information: (Click the icon to view the information.) Budgeted usage of Materials Management labor-hours Actual usage of Materials Management labor-hours Machining Department 1,150 1,050 Assembly Department 2,850 3,450 Total 4,000 4,500
Requirement 1. Using the single-rate method, allocate Materials Management Department costs to the Machining and Assembly Departments in these three ways. Start with allocating (a), then (b), and finally (c). (Round the budgeted rate per item to the nearest cent.) (c) (b) 63.00 $ Budgeted rate per item: Machining Assembly Total $ Rate per item 63.00 $ Machining Assembly Total 72,450 $ 179,550 252.000 $ 66,150 $ 217,350 283,500 $ 48.00 Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted foxed-cost rate and budgeted usage of Materials Management Department services by the Machining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.) 50,400 165,600 216,000 Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted fixed-cost rate and budgeted usage of Materials Management Department services by the Mishining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.) Variable
Transcribed Image Text:Requirement 1. Using the single-rate method, allocate Materials Management Department costs to the Machining and Assembly Departments in these three ways. Start with allocating (a), then (b), and finally (c). (Round the budgeted rate per item to the nearest cent.) (c) (b) 63.00 $ Budgeted rate per item: Machining Assembly Total $ Rate per item 63.00 $ Machining Assembly Total 72,450 $ 179,550 252.000 $ 66,150 $ 217,350 283,500 $ 48.00 Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted foxed-cost rate and budgeted usage of Materials Management Department services by the Machining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.) 50,400 165,600 216,000 Requirement 2. Using the dual-rate method, compute the amount allocated to the Machining and Assembly Departments when (a) the budgeted fixed-cost rate is calculated using budgeted fixed costs and practical capacity of the Materials Management Department, (b) fixed costs are allocated based on the budgeted fixed-cost rate and budgeted usage of Materials Management Department services by the Mishining and Assembly Departments, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage. (Round the rate per item to the nearest cent.) Variable
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