Support Department Cost Allocation-Direct MethodChristmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance andjanitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocatedbased on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruningareas typically have about 24 and 56 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9times as many machine hours as the pruning process. The total costs of each department are as follows:Maintenance DepartmentJanitorial Department$6,0005,000Cutting DepartmentPruning Department54,0009,000Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all supportcosts to the production departments.CuttingDepartmentPruningDepartmentProduction departments' total costs$

TStep 1:Workings: Maintenance Department6000 Janitorial Department5,000 Cutting Department54,000…

Answered: Support Department 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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Temple Lights, Inc. produces Hanukkah menorahs in its Cutting and Molding departments. The Maintenance and Security departments support the production of the menorahs. 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 Production departments' total costs Feedback Security Department 2,000 Machine hours 800 Asset value $1,390 $2,000 $37,440 Department cost $16,640 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 7,200 $2,500 $64,000 Cutting Molding Department Department X Molding Department 10,800 $5.500 $81,000 Check My Work The reciprocal services method considers all inter-support-department service, and thus is the most accurate of the three support…
Support Department Cost Allocation—Direct Method Charlie’s Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitorial and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 44,800 square feet and holds assets valued at about $64,800. The Cutting Department spans about 35,200 square feet and holds assets valued at about $151,200. Charlie’s Wood Works allocates support department costs using the direct method. If costs from the Janitorial Department are allocated based on square feet and costs from the Security Department are allocated based on asset value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department. %
Riverbed Delights manufactures a wide variety of holiday and seasonal decorative items. Riverbed's activity-based costing overhead rates are: Purchasing Storing Machining Supervision Total cost $394 per order S $2 per square foot/days $100 per machine hour The Snow Man project involved 3 purchase orders, 5,400 square feet/days, 74 machine hours, and 54 direct labor hours. The cost of direct materials on the job was $20,400 and the direct labor rate is $32 per hour. Determine the total cost of the Snow Man project. $5 per direct labor hour
BNC Company produces a product in two departments: (1) mixing and (2) finishing. the company uses a process cost accounting system. Accounting Transactions No. Transactions (e) manufacturing overhead is applied to the product based on machine hours used in each department: mixing department - 400 machine hours at $30 per machine hour. Finishing department - 500 machine hours at $20 per machine hour. (f) units costing $56,000 were completed in the mixing department and were transferred to the finishing department. (g) units costing $70,000 were completed in the finishing department and were transferred to finished goods. (h) finished goods costing $40,000 were sold on account for $55,000. Prepare the journal entries to record the preceding transactions for BNC Company. List debit transactions first and then list credit transactions. General Journals No. Account Titles and Explanation Debit ($) Credit ($) (e) work in process inventory - mixing…
Support Department Cost Allocation-Direct Method Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 7 and 63 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Maintenance Department Janitorial Department Cutting Department Pruning Department $8,000 3,000 57,000 13,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production…
Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity- based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Windows DESKTOP- Windows Number of setups Number of products Direct labor-hours Total overhead cost Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y FEB +1 (252) 484-2153 Oh nun Product Y Product Z 8,800 3,200 240 40 1 1 8,800 3,200 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y an Product Z? (F your intermediate calculations to 2 decimal places. Round your answers to 2…
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitorial and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 48,720 square feet and holds assets valued at about $79,040. The Cutting Department spans about 35,280 square feet and holds assets valued at about $128,960. Charlie's Wood Works allocates support department costs using the direct method. If costs from the Janitorial Department are allocated based on square feet and costs from the Security Department are allocated based on asset value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department. % All work saved. Û ✰ O 0 0 В B Previous Next
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitori and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 50,400 square feet and holds assets valued at abo $88,000. The Cutting Department spans about 33,600 square feet and holds assets valued at about $132,000. Charlie's Wood Works allocates support department ce using the direct method. If costs from the Janitorial Department are allocated Based on square feet and costs from the Security Department are allocated based on a value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department.
Support Department Cost Allocation-Direct Method Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 36 and 54 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Maintenance Department Janitorial Department $7,000 4,000 Cutting Department Pruning Department 52,000 13,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production…
Birdie Limited is a manufacturing company producing a variety of golf clubs. It operates from one factory that is geographically separated from its head office. The components for the clubs are assembled in the assembling department; they are then passed through to the finishing department where they are painted and packed. There are three service cost centres: administration, stores, and manufacturing support. The following costs were collected for the year to 31 May 2021: Department Allocated cost centre Number of Assembling Finishing Administration overhead costs (£,000) 225 60 employees 67 134 84 300 89 Stores 17 Manufacturing support 120 34 Additional information: The allocated cost centre overhead costs are all considered to be indirect costs as far as specific units are concerned. During the year to 31 May 2021, 208,000 machine hours were worked in the assembling department, and 270,000 direct labour hours in the finishing department. During the year to 31 May 2021, the stores…
Support Department Cost Allocation-Reciprocal Services Method Blue Africa Inc. produces laptops and desktop computers. The company's production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company's production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $242,000. The total cost of the Cafeteria Department is $878,000. The number of employees and the square footage in each department are as follows: Employees Square Feet 10 18 2,400 ETT 40 2,400 50 Security Department Cafeteria Department Laser Department Forming Department Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments. Security Department cost allocation 540 3,200 Cafeteria…
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