TB MC Qu. 11-50 (Algo) Steven Parker owns and operates Steven's Septic Service and... Steven Parker owns and operates Steven's Septic Service and Legal Advice. Steven's two revenue generating (production) operations are supported by two service departments: Clerical and Janitorial. Costs in the service departments are allocated in the following order using the designated allocation bases: Clerical: Variable cost: expected number of work orders processed Fixed cost: long-run average number of work orders processed Janitorial: Variable cost: labor hours Fixed cost: square footage of space occupied Average and expected activity levels for next month (June) are as follows: No. of Work Orders Expected Average Labor Hours Square Footage Septic Service 50 75 1,000 2,295 Legal advice 30 25 1,500 2,805 Clerical 15 15 510 1,710 Janitorial 5 25 310 1,110 Expected costs in the service departments for June are as follows: Clerical Janitorial Variable costs $ 15,400 $ 5,800 Fixed costs $ 9,000 $ 1,020 Under the direct method of allocation, what is the total amount of service cost allocated to the Legal Advice operation for June? (Round all calculations to the nearest whole dollar.) Multiple Choice $12,066. $12,966. $8,656. $10,595.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
TB MC Qu. 11-50 (Algo) Steven Parker owns and operates Steven's Septic Service and...
Steven Parker owns and operates Steven's Septic Service and Legal Advice. Steven's two revenue generating (production) operations are supported by two service departments: Clerical and Janitorial. Costs in the service departments are allocated in the following order using the designated allocation bases:
Clerical:
Variable cost: expected number of work orders processed
Fixed cost: long-run average number of work orders processed
Janitorial:
Variable cost: labor hours
Fixed cost: square footage of space occupied
Average and expected activity levels for next month (June) are as follows:
| No. of Work Orders Expected | Average | Labor Hours | Square Footage | |
| Septic Service | 50 | 75 | 1,000 | 2,295 |
| Legal advice | 30 | 25 | 1,500 | 2,805 |
| Clerical | 15 | 15 | 510 | 1,710 |
| Janitorial | 5 | 25 | 310 | 1,110 |
Expected costs in the service departments for June are as follows:
| Clerical | Janitorial | |||||
| Variable costs | $ | 15,400 | $ | 5,800 | ||
| Fixed costs | $ | 9,000 | $ | 1,020 | ||
Under the direct method of allocation, what is the total amount of service cost allocated to the Legal Advice operation for June? (Round all calculations to the nearest whole dollar.)
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$12,066.
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$12,966.
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$8,656.
-
$10,595.
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