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 the asset value. Information about each department is provided in the following table: Machine hours Asset value Department cost Maintenance Department 800 $2,000 $40,320 Security Department 2,000 $1,450 $17,920 Cutting Department Production departments' total costs $ 8,400 $2,000 $65,000 Molding Department 9,600 $6,000 $83,000 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 Molding Department $

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 the asset value. Information about each department is provided in the following table: Machine hours Asset value Department cost Maintenance Department 800 $2,000 $40,320 Security Department 2,000 $1,450 $17,920 Cutting Department Production departments' total costs $ 8,400 $2,000 $65,000 Molding Department 9,600 $6,000 $83,000 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 Molding Department $

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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Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 310,000 Polishing $ 145,000 Product modification 550,000 Providing power $ 260,000 System calibration 560,000 Additional information on the drivers for its production activities follows. Grinding 17,000 machine hours Polishing 17,000 machine hours Product modification 1,500 engineering hours Providing power 15,000 direct labor hours System calibration 200 batches Problem C-1A Part 3 Job 3175 Job 4286 Number of units 150 units 1,875 units Machine hours 350 MH 3,500 MH Engineering hours 30 eng. hours 30 eng. hours Batches 10 batches 30 batches Direct labor hours 520 DLH 4,680 DLH
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The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $489,600 are allocated on the basis of machine hours. The Accounting Department's costs of $122,400 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $210,000 and $410,000, respectively. Maintenance Accounting A B Machine hours 895 80 2,400 320 Number of employees 2 2 8 4 What is the Maintenance Department's cost allocated to Department A using the direct method? Note: Do not round intermediate calculations.
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