Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively. Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. The cafeteria cost charges to the Auto division, and Truck division.

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Answer 1

Question

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

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Problem 11-22 (Algo) Service Department Charges [LO11-4] Sharp Motor Company has a cafeteria that serves two operating divisions-an Auto Division and a Truck Division. The costs of operating the cafeteria are budgeted at $72,000 per month plus $0.60 per meal served. The fixed costs of the cafeteria are determined by peak-period requirements. The Auto Division is responsible for 63% of the peak- period requirements, and the Truck Division is responsible for the other 37%. For June, the Auto Division estimated it would need 84,000 meals, and the Truck Division estimated it would need 54,000 meals. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Auto Division. Another 54,000 meals were served to the Truck Division as planned. The cafeteria's actual fixed costs for June totaled $75,000 and its actual meal costs totaled $82,800. Required: 1. How much cafeteria cost should be charged to each division for June? 2. Assume the company…

QUESTION 8 Avery Company has compiled the following data for the upcoming year: Sales are expected to be 13300 units at $31 each. • Each unit requires 2.1 pounds of direct materials at $2.1 per pound. • Each unit requires 0.7 hours of direct labor at $14 per hour. Manufacturing overhead is $6 per unit. Selling and administrative costs are $6 per unit What is Avery's budgeted cost of goods sold? M Az

5

Answer 2

Question

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

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Answer 3

Question

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

Answer 6

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

Answer 7

Chapter 11, Problem 22P

1.

To determine

Concept Introduction:

Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation.

The cafeteria cost charges to the Auto division, and Truck division.

Answer 8

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

Answer 9

2.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The total cost allocated to each division if the cafeteria cost is allocated based on the number of meals served.

Answer 10

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

Answer 11

3.

To determine

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).

Answer 12

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

Answer 13

4.

To determine

Fixed costs: Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The strategy taken by managers of operating departments to estimate peak-period requirement and the steps should be taken by the top management to neutralize such strategies.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Prob. 3Q Ch. 11 - Prob. 4Q Ch. 11 - Prob. 5Q Ch. 11 - Prob. 6Q Ch. 11 - Prob. 7Q Ch. 11 - Prob. 8Q Ch. 11 - Prob. 9Q Ch. 11 - Prob. 10Q

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs. The criticism of the allocation method used in Part (2).

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Chapter 11 Solutions

Cost allocation: Cost allocation is a process of assigning or allocating costs to each and every unit or division using a predetermined rate. It helps to determine which division or unit of a company is responsible for which costs.

The criticism of the allocation method used in Part (2).