[The following information applies to the questions displayed below]National Retail has two departments, Housewares and Sporting.Indirect expenses for the period follow.RentAdvertisingInsuranceTotal$45,00025,00010.000$80,000The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 ofindirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirectexpenses to each department based on the square feet it occupied.The company now wants to allocate indirect expenses using the allocation bases shown below.DepartmentSportingHotalSquare Feet1,4002,6004,000Value of Insured40,000$100,000Problem 22-2A (Algo) Part 1Required:1. Allocate indirect expenses to the two departments using the allocation method used in prior periods.DepartmentSquare FootageSpartingTotal

Overhear rate :— It is the rate used to allocate overhead costs or indirect expenses to cost object.…

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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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T, and U, and pays for general advertising that benefits all departments. Advertising expense totaled $82,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department T based on departmental sales. (Do not round your intermediate calculations. Round the answer to the nearest whole dollar, i.e. 17,525.69 would be 17,526): Sales per department Department Sales S $ 106,000 T 215,250 U 149,150 Total $ 470,400
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Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Square Feet Asset Values Employees Materials 26 30,000 $ 9,300 Personnel 13 12,000 2,480 Manufacturing Packaging 52 66,000 37,820 39 12,000 12,400 Total 130 120,000 $ 62,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 82,700 Number of employees Allocation Base 52,000 Square feet occupied 23,500 Asset values $ 158,200 Allocate each of the three indirect expenses to the four departments.
Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $10,130,000 $4,080,000 $3,400,000 Variable expenses 4,080,000 1,630,000 1,930,000 Direct fixed expenses 4,580,000 1.130.000 1,330,000 Average assets 8,080,000 4,080,000 1,600,000 Required rate of return 10% 10% 10% (a) Your answer is incorrect. Calculate the current residual income for each distribution channel. (If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Residual Income $ Retail $ Online $ Catalog
Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A B C Sales $ 330,000 $ 480,000 $ 500,000 Cost of goods sold (242,000 ) (184,000 ) (190,000 ) Sales commissions (30,000 ) (44,000 ) (44,000 ) Contribution margin 58,000 252,000 266,000 General fixed operating expenses (allocation of president’s salary) (92,000 ) (92,000 ) (92,000 ) Advertising expense (specific to individual divisions) (6,000 ) (20,000 ) 0 Net income (loss) $ (40,000 ) $ 140,000 $ 174,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…
Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 15,700 calls and incurred costs of $329,700. If 3,150 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to which of the following: A. $329,700. B. $66,150. C. $21. D. $263,550. E. $0.
Boston Home Center (BHC) offers customers the use of a truck at $64 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer usage: Cost Driver Rate Cost Driver Volume Resources used Operation $ 0.55 per mile 46,200 miles Administration 25.00 per trip 1,874 trips Resources supplied Operation $ 35,400 Administration $ 62,400 Sales revenue totaled $80,000. Required: Prepare a traditional income statement. Prepare an activity-based income statement. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a traditional income statement. Traditional Income Statement Sales revenue Operation costs Administration costs Operating profit Activity-Based Income Statement Resources Used Unused Resource Capacity…
The unallocated income statement of De Souza Motel is shown below: Rooms F&B Total Revenue 257,000 133,000 390,000 Cost of Sales 48,000 48,000 Payroll and Related Expenses 60,000 30,000 90,000 Other Direct Expenses 40,000 12,000 52,000 Total Expenses 100,000 90,000 190,000 Departmental Income 157,000 43,000 200,000 Administrative &General 60,000 Sales&Marketing 25,000 POM&Utility costs 20,000 GOP 95,000 Insurance 10,000 Depreciation 12,000 Total Fixed Charges 22,000 Income Before Income Taxes 73,000 Income Taxes 30,000 Net Income 47,000 Square Footage: Rooms- 120,000; F&B- 70,000 Required: 1.Which costs are indirect costs? Explain why! 2.Using square footage and the unallocated income statement , prepare a fully allocated income statement.…
Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $110,000. Sales for its operating departments follow. Department Sales 1 $ 247,500 2 455,400 3 287, 100 How much advertising cost is allocated to each operating department if the allocation is based on departmental sales? Note: Do not round your intermediate calculations.
The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease $ 78,000 Cosmetics Department sales commissions-Northridge Store $ 5,270 Corporate legal office salaries $ 66,500 Store manager's salary-Northridge Store $ 12,200 Heating-Northridge Store $ 20,400 Cosmetics Department cost of sales-Northridge Store $ 39,100 Central warehouse lease cost $ 9,800 Store security-Northridge Store $ 16,200 Cosmetics Department manager's salary-Northridge Store $ 4,310 The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $108,000. Sales for its operating departments follow. Department 2 Sales $ 272,500 523, 200 294,300 How much advertising cost is allocated to each operating department If the allocation is based on departmental sales? (Do not round your intermediate calculations.) Department Sales Percent of Total 1 2 3 Total % % % % Cost Allocated
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