Service Department AService Department BProducing Department CProducing Department DDirect costs$114,40076,40022,40028,200Proportion of service by A to:B10%C60%30%DProportion of service by B to:A30%C20%D50%Using the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rounded to the nearestwhole dollar) is:

Lets understand the basics.Cost allocation methods are as follows:-(1) Direct method(2) Step down…

Service Department A Service Department B Producing Department C Producing Department D Proportion of service by A to: B 10% 60% 30% C D Direct costs $114,400 76,400 22,400 28, 200 Proportion of service by B to: A 30% 20% 50% 0D C Using the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rour whole dollar) is:

Service Department A Service Department B Producing Department C Producing Department D Proportion of service by A to: B 10% 60% 30% C D Direct costs $114,400 76,400 22,400 28, 200 Proportion of service by B to: A 30% 20% 50% 0D C Using the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rour whole dollar) is:

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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ed - t 0 ances Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B $ 58.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $88.00 26.40 26.40 52.80 $ 35.20 40% 12.00 34.40 46.40 $ 11.60 201 Contribution margin per pound of the constraining resource Required 1 C $ 80.00 12.00 44.00 56.00 $ 24.00 The company estimates it can sell 800 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,400 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin the company can earn per month if it makes optimal use of its 5,400 pounds of…
Cost pool $58,200 $88,500 Total cost in cost pool O $7,200 pool 1 pool 2 pool 3 Compute allocated capacity costs for product Alpha. $18,000 $7,500 $63,000 $45,000 not enough information need to know the total number of cost driver units Number of cost driver units product Alpha 20 20 30 -- product Beta 30 5 12
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