Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 10, Problem 7E
Columbia Products Inc. has two divisions, Salem and Seaside. For the month ended March 31, Salem had sales and variable costs of $500,000 and $225,000, respectively, and Seaside had sales and variable costs of $800,000 and $475,000, respectively. Salem had direct fixed production and administrative expenses of $60,000 and $35,000, respectively, and Seaside had direct fixed production and administrative expenses of $80,000 and $45,000, respectively. Fixed costs that were common to both divisions and couldn’t be allocated to the divisions in any meaningful way were selling, $33,000, and administration, $27,000.
Prepare a segmented income statement by division for March.
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Martinez Company's relevant range of production is 9,500 units to 14,500 units. When it produces and sells 12,000 units, its unit costs are as follows:
Amount per unit
Direct materials $5.60
Direct labor 3.10
Variable manufacturing overhead 1.40
Fixed manufacturing overhead 3.60
Fixed selling expense 2.60
Fixed administrative expense 2.20
Sales commissions 1.20
Variable administrative expense 0.45
For financial accounting purposes, what is the total amount of period costs incurred to sell 12,000 units?
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows:
Proportion of Services Used by:
Department
Direct costs
S1
S2
P1
P2
S1
$ 72,000
0.70
0.10
0.20
S2
$ 157,000
0.20
0.30
0.50
P1
$ 214,000
P2
$ 179,000
Under the step method of allocation, the total amount of service costs allocated to producing departments would be:
Multiple Choice
$174,000.
$178,600.
$74,000.
$229,000.
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows:
Proportion of Services Used by:
Department
Direct costs
S1
S2
P1
P2
S1
$ 146,000
0.70
0.10
0.20
S2
$ 187,000
0.20
0.30
0.50
P1
$ 178,000
P2
$ 179,000
Under the direct method of cost allocation, the amount of S1 costs allocated to P1 would be:
Note: Do not round intermediate calculations.
$14,600.
$148,500.
$58,667.
$48,667.
Chapter 10 Solutions
Principles of Cost Accounting
Ch. 10 - What is the difference between absorption costing...Ch. 10 - Distinguish between product costs and period...Ch. 10 - What effect will applying variable costing have on...Ch. 10 - What are the advantages and disadvantages of using...Ch. 10 - Prob. 5QCh. 10 - What is the difference between gross margin and...Ch. 10 - Why are there objections to using absorption...Ch. 10 - What are common costs?Ch. 10 - How is a contribution margin determined, and why...Ch. 10 - What are considered direct costs in segment...
Ch. 10 - What is cost-volume-profit analysis?Ch. 10 - Prob. 12QCh. 10 - What steps are required in constructing a...Ch. 10 - What is the difference between the contribution...Ch. 10 - What impact does income tax have on the break-even...Ch. 10 - Define differential analysis, differential...Ch. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - What are distribution costs?Ch. 10 - What is the purpose of the analysis of...Ch. 10 - In cost analysis, what determines which costs...Ch. 10 - Yellowstone Fabricators uses a process cost system...Ch. 10 - Using the information presented in E10-1, prepare...Ch. 10 - The chief executive officer of Acadia, Inc....Ch. 10 - The following production data came from the...Ch. 10 - A company had income of 50,000, using variable...Ch. 10 - The fixed overhead budgeted for Ranier Industries...Ch. 10 - Columbia Products Inc. has two divisions, Salem...Ch. 10 - The sales price per unit is 13 for the Voyageur...Ch. 10 - Teton, Inc. sells its only product for 50 per...Ch. 10 - A new product is expected to have sales of...Ch. 10 - Augusta Industries manufactures and sells two...Ch. 10 - A company has sales of 1,000,000, variable costs...Ch. 10 - Prob. 13ECh. 10 - A company has prepared the following statistics...Ch. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Redwood Industries needs 20,000 units of a certain...Ch. 10 - Prob. 18ECh. 10 - Biscayne Industries has determined the cost of...Ch. 10 - Roosevelt Enterprises has determined the cost of...Ch. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Arctic Software Inc. has two product lines. The...Ch. 10 - Prob. 7PCh. 10 - The production of a new product required Zion...Ch. 10 - Grand Canyon Manufacturing Inc. produces and sells...Ch. 10 - Prob. 10PCh. 10 - Emerald Island Company is considering building a...Ch. 10 - Royale Aluminum desires an after-tax income of...Ch. 10 - Deuce Sporting Goods manufactures a high-end model...Ch. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 1MCCh. 10 - Denali Company manufactures household products...
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