The Green Shop sells plants, fertilizers, and other garden products. The store has three departments: plants, chemicals, and tools. Certain information about the revenues and expenses of the departments for the year ended December 31, 20X1, is given below. Plants Chemicals Tools Allocated indirect expenses $ 10,400 $ 6,200 $ 5,800 Direct expenses 34,000 21,500 19,500 Cost of goods sold 57,650 54,850 44,650 Sales 119,150 91,450 52,350 Sales returns and allowances 2,150 450 350 Required: 1. Prepare a departmental income statement showing the contribution margin and the net profit for each department.

The Green Shop sells plants, fertilizers, and other garden products. The store has three departments: plants, chemicals, and tools. Certain information about the revenues and expenses of the departments for the year ended December 31, 20X1, is given below. Plants Chemicals Tools Allocated indirect expenses $ 10,400 $ 6,200 $ 5,800 Direct expenses 34,000 21,500 19,500 Cost of goods sold 57,650 54,850 44,650 Sales 119,150 91,450 52,350 Sales returns and allowances 2,150 450 350 Required: 1. Prepare a departmental income statement showing the contribution margin and the net profit for each department.

Name: The Green Shop sells plants, fertilizers, and other garden products. T
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Description: The Green Shop sells plants, fertilizers, and other garden products. The store has three departments: plants, chemicals, and tools. Certain information about the revenues and expenses of the departments for the year ended December 31, 20X1, is given

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $24,000 and for Purchasing is $34,000. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Office Department Books Magazines Newspapers Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Totals Purchasing Department Books Magazines Newspapers Sales $ 495,000 198,000 207,000 $ 900,000 Totals Purchase Orders Allocation Base 516 360 324 1,200 Allocation Base Percent of Allocation Base Numerator Denominator % of Total Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Cost to be Allocated Allocated Cost Allocated Cost
Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,000 and for Purchasing is $56,200. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Sales Purchase Orders Books $ 186,200 546 Magazines 95,000 364 Newspapers 98,800 390 Total $ 380,000 1,300 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information.
Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,600 and for Purchasing is $40,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Office Department Books Magazines Newspapers Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Totals Purchasing Department Books Magazines Newspapers Sales $ 210,700 86,000 133,300 $ 430,000 Totals Allocation Base Purchase Orders Allocation Base 1,620 1,080 900 3,600 Percent of Allocation Base Numerator Denominator % of Total Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost
Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,600 and for Purchasing is $40,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Office Department Books Magazines Newspapers Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Totals Purchasing Department Books Magazines Newspapers Sales $ 210,700 86,000 133,300 $ 430,000 Totals Allocation Base Purchase Orders Allocation Base 1,620 1,080 900 3,600 Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total 0 0 0 0 Percent of Allocation Base Numerator Denominator % of Total 0 0 0 0 Cost to be Allocated Allocated Cost
A retail store has three operating departments (Hardware, Clothes, and Home) supported by two service departments (Advertising and Purchasing). Total Advertising expenses of $ 15,000 are allocated to the operating departments based on sales. Total Purchasing expenses of $17,000 are allocated to the operating departments based on purchase orders. Department Purchase Orders Sales Hardware 550 $ 115,000 Clothes 1, 650 70, 000 Home 3,300 65,000 Totals 5, 500 $250,000
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Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.
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	Plants	Chemicals	Tools
Allocated indirect expenses	$	10,400		$	6,200	$	5,800
Direct expenses		34,000			21,500		19,500
Cost of goods sold		57,650			54,850		44,650
Sales		119,150			91,450		52,350
Sales returns and allowances		2,150			450		350