Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the twooperating departments using different allocation bases. The following information is available for the current period:Allocation BasisNumber of employeesOffice ExpensesSalariesTotal$ 31,000DepreciationAdvertising21,00041,000Cost of goods soldPercentage of total salesDepartmentNumber of employeesDrillingGrindingTotal8001,2002,000$ 79,800130,200$ 210,000The amount of depreciation that should be allocated to Grinding for the current period is:Sales$ 330,000Cost of goods sold495,000$ 825,000

Cost allocation:The allocation of costs for service departments is a crucial step in cost…

Answered: The amount of depreciation that should…

Business

Accounting

The amount of depreciation that should be allocated to Grinding for the current period is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: For depreciation purposes, what would be the first cost of the new machine(depreciation base)?

A: Depreciation is the charge or expense to be accounted in the books against an asset of the…

Q: 4. The most appropriate definition of depreciation is: A. A means of determining the decrease in the…

A: Introduction:- The following methods used to calculate depreciation as follows under:- Straight…

Q: Which of the following statements is true? - When using the double-declining-balance method, the…

A: Depreciation refers to fall in the value of capital assets either due to lapse of time, usage or…

Q: In calculating depreciation, both the long-lived asset's cost and useful life are based on…

A: Depreciation is a crucial aspect of accounting that reflects the allocation of an asset's cost over…

Q: Chloe Company acquires equipment on January 3, 2024. The company uses the diminishing-balance method…

A: Depreciation expense is reduction in the value of assets due to its use, wear or tear.Salvage value…

Q: When moving from the low end to the high end of the relevant range, straight-line depreciation…

A: Depreciation is a reduction in the value of an asset over the time period due to its wear and tear.…

Q: which method of depreciation is used when the cost of an asset is written off in equal amounts over…

A: Depreciation represents the reduction in the value of an asset over an expected life.

Q: The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in…

A: Depreciable cost is that portion of cost of asset which can be depreciated. Trade in value relates…

Q: Which depreciation method ignores residual value until the last year of depreciation? Why?

A: Double declining method of depreciation does not consider residual value while calculating…

Q: Prepare depreciation schedules for the life of the asset under the following depreciation methods:…

A: Depreciation is reduction in the value of asset due to its use, wear or tear.Salvage value which is…

Q: Which of the following depreciation methods will result in the most depreciation expense over the…

A: Depreciation is method to allocate the cost of the Assets over its useful life

Q: When the amount of use of a plant asset varies from year to year, the method of determining…

A: Depreciation : The process of allocation of relevant cost of a fixed asset over its useful life is…

Q: Straight-line depreciation per annum is defined as: a. Initial Cost / Useful Life b. Initial Cost…

A: Depreciation refers to the amortization of value or cost of the asset used over a period of life of…

Q: Name the depreciation method that is the most appropriate for assets where a metric can be used to…

A: Unit-of-output depreciation method: It provides the fixed amount of depreciation for each unit of…

Q: What is the appropriate depreciation time for a new long-lived asset added to an existing one?…

A: Depreciation refers to the concept of evaluating the decrease in the value of an asset that occurs…

Q: Explain the concept of depreciation and different methods used to calculate and record it, including…

A: The orderly distribution of a tangible asset's purchase price over the period of its useful life is…

Q: Depreciation should be applied to a new long-lived item over what time period? Explain

A: This question explains about applied to a new long-lived item over what time period.

Q: [The following information applies to the questions displayed below.] Ramirez Company installs a…

A: The question is based on the concept of Cost Accounting.

Q: What industry would most likely use the straight-line and units of activity depreciation methods and…

A: Depreciation seems to be the systematic distribution of an asset's cost throughout its service life.…

Q: Which of the following best describes depreciation? A.ccounts for the market value of a physical…

A: Depreciation is an expense which is shown and recorded in the expense side of the income statement.

Q: What is the amount of the annual depreciation computed by the straight-line method?

A: Depreciation: It is the reduction in the value of an asset due to normal wear and tear,…

Q: Under what depreciation method(s) is an asset’s bookvalue used to calculate depreciation each…

A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…

Q: Requlred Information Use the following information for the Quick Study below. [The following…

A: Investment is the allocation of the money so as to earn benefit over the money invested.

Q: Looking for Decpreciation for Year 4 under Units of production.

A: 1. Straight Line Depreciation: Depreciation Expense = (Cost - Salvage Value) / Useful Life Given:…

Q: How do you figure units-of-production method depreciation?

A: The business entities are required to charge the depreciation expense on their assets so that the…

Q: Problem 4-10 Rental Income and Expenses (LO 4.7) Sherry rents her vacation home for 6 months and…

A: Particulars Amount Amount Gross Rental Income $ 6,000 Less : Expenses : Taxes (…

Q: What is a portion of plant asset cost allocated as expense for the period? What is the difference…

A: Carrying Amount: The carrying amount is the purchase price less impairment and depreciation and is…

Q: Explain the differences between cost depletion, asset depreciation, and amortization. Explain the…

A: The objective of this question is to understand the differences between cost depletion, asset…

Q: The formula for straight-line depreciation is O service life/(cost + residual value). O cost/service…

A: Straight Line depreciation is a method that spreads the cost of fixed asset over its useful life to…

Q: Compute the declining-balance depreciation schedule for an asset with thefollowing data:

A: Depreciation: It refers to a gradual decrease in the fixed asset’s value because of obsolescence,…

Q: pletable amount by the estimated life in terms of units of output?

A: Depletable amount refers to the amount left after salvage value from the total cost of an intangible…

Q: What factors must be known or estimated in order to compute depreciation expense?

A: Definition: Depreciation: Depreciation is a decrease in the value of the fixed assets over a period…

Question

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two
operating departments using different allocation bases. The following information is available for the current period:
Allocation Basis
Number of employees
Office Expenses
Salaries
Total
$ 31,000
Depreciation
Advertising
21,000
41,000
Cost of goods sold
Percentage of total sales
Department
Number of employees
Drilling
Grinding
Total
800
1,200
2,000
$ 79,800
130,200
$ 210,000
The amount of depreciation that should be allocated to Grinding for the current period is:
Sales
$ 330,000
Cost of goods sold
495,000
$ 825,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Cost allocation meaning

VIEW

Step 2: Allocation of Depreciation expense to Drilling and Grinding

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

In case of Iron making companies the amount of resource extracted has to be debited to the expense account. This method of transferring the cost of natural resource to the expense account is known as a. Depreciation b. Deduction c. Dilution d. Depletion
Depreciation expense is the portion of a plant asset's cost that is allocated to expense for a period. True or False
1. What amount should be recorded initially as cost of the right of use asset? 2. What is the annual depreciation of the right of use asset?
For project A, what was the calculations for depreciation to get to the final answer of 720 000?
Depreciation of an asset based on the number of hours of usage is a(n) O accelerated method O replacement method time-based method O activity-based method
When calculating depreciation expense using the straight line method, useful life is expressed as time dollars Units expected to be produced salvage value Next *
Improvement of the production line resulting in an increase in productivity, $32,100 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?
Based on the information on the attached file. Prepare the depreciation schedule using the units-of-production method of depreciation
T/F: Depreciation is the process of allocating the cost of a long-term asset over its useful life.
Which of the following best describes an accelerated depreciation method? A. A method by which an equal amount of expense is assigned for every full year of use. B. A method by which depreciation is based on the level of actual usage rather than the passage of time. C. A method of determining depreciation which assigns larger expenses to the initial years of an asset’s service and smaller expenses to the later years. D. A method of allocating the cost of a wasting asset to expense over the periods during which the value is removed from the property.
Why are the cost of plant/long term assets recovered through depreciation vs. expensed out during the period purchased?
How to do depreciation with sum-of-the-year digit method.