University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing andDeveloping). Management has decided to allocate maintenance costs on the basis of machine hours in each department andpersonnel costs on the basis of labor-hours worked by the employees in each.The following data appear in the company records for the current period:Maintenance Pernonnel Printing Developing1,400Machine-hours1,4009004, 200Labor-hourDepartment direct costs90062, e003,100$11, 700$12, 800$14, 500Required:Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should beindicated by a minus sign. Do not round intermediate calculations.)Maintenance Personnet Printing DevelopingService department costsMaintenance allocationPersonnel allocationTotal costs allocated

Under the direct method allocation, cost incurred in service departments will be allocated directly…

Answered: University Printers has two service…

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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Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costs are fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $5,054,000 19,000 266,000 Machining Assembly 5 10 11 2 Machining 4 12 Assembly 5 3 Assembly $361,000 266,000 14,000 Total 15 13 Total 9 15 Total $5,415,000 285,000 280,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much…
McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay supplier invoices. The total cost of their salaries is $450,000. The work distribution for the activities that they perform is as follows: Activity Percentage of Time on Each Activity Comparing source documents 10 % Resolving discrepancies 55 % Processing payment 35 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment Comparing source documents Sfill in the blank 1 Resolving discrepancies $fill in the blank 2 Processing payment Sfill in the blank 3 Comparing source documents Resolving discrepancies Processing payment
Webster Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $250,000 10,000 hours Account billing lines $125,000 5,000,000 lines Account verification accounts $50,000 50,000 accounts Correspondence letters $ 25,000 5,000 letters Total costs $450,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 1,000 hours 3,000 hours Account billing lines 200,000 lines 300,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,500 letters How much of the account inquiry cost will be assigned to Department A? Group of answer choices $5,000 $250,000 $75,000 $25,000
Neptune Fabrication Plant has provided you with the following information: Total manufacturing overhead costs estimated at the beginning of the year $258,000 Total direct labor costs estimated at the beginning of the year $121,000 Total direct labor hours estimated at the beginning of the year 6,000 direct labor hours Actual manufacturing overhead costs for the year $245,000 Actual direct labor costs for the year $131,000 Actual direct labor hours for the year 5,200 direct labor hours The company bases its manufacturing overhead allocation on direct labor hours. What was the unadjusted ending balance in the Manufacturing Overhead account? Question content area bottom Part 1 A. $34,322 credit balance B. $34,322 debit balance C. $21,400 credit balance D. $21,400 debit balance
Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Machining Assembly Machining $180,000 Assembly 65,000 Maintenance 35,000 — 0.2 0.5 0.3 Cafeteria 30,000 0.8 — 0.1 0.1 Caro estimates that the variable costs in the Maintenance Department total $11,000, and in the Cafeteria variable costs total $18,000. Avoidable fixed costs in the Maintenance Department are $10,000. Required: If Caro outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round intermediate calculations.) Maximum Amount:
The following information is available for the two production departments(machining and assembly) and one service department (the canteen) at amanufacturing company. Machining Assembly CanteenBudgeted overheads £25,000 £20,000 £11,000Number of staff 30 20 5After reapportionment of the service cost centre costs, what will be theoverhead cost of the assembly department cost centre?a) £25,500 b) £24,400 c) £24,000 d) £4,400
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Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Costs Personnel Legal Complete this question by entering your answers in the tabs below. Total Personnel $ Personnel $ 10,800 $ 320,000 Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. 320,000 $ 320,000 $ Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the reciprocal method. Note: Do not round intermediate calculations. Round your final answers…
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $246,250 in the Molding department and $206,250 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows. Number of Molding Department Units Hours per Unit Total Hours Trimming Department Hours per Unit Total Hours Part Z Part X Totals 3,000 2.0 MH per unit 4,000 2.5 MH per unit 6,000 MH 10,000 MH 16,000 MH 3 DLH per unit 9,000 DLH 4 DLH per unit 16,000 DLH 25,000 DLH Exercise 17-7 (Algo) Plantwide overhead rate LO P1 Required: 1. Compute the plantwide overhead rate using direct labor hours as the allocation base. 2. Determine the overhead cost per unit for each part using the…
Company has two production departments; Cutting and Painting, and two service departments Maintenance and design which directly support two production departments. The first level overhead costs of these departments are as follows. Cutting Painting $400,000 Design 640,000 Maintenance 96,000 500,000 The following schedule reflects the use of the Maintenance and Design Departments' output by other departments: Maintenance Maintenance (hours) Design (minutes) 240,000 0 Design 1,000 0 Cutting 1,000 his 840,000 Painting 8,000 120,000 Required 1. Allocate service departments cost to production departments by using direct method and step-down method.
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