SURVEY OF ACCOUNT.(LL)-W/ACCESS>CUSTOM<
5th Edition
ISBN: 9781260222326
Author: Edmonds
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 12, Problem 1E
LO 4-1 Exercise 4-1A Direct versus indirect costs
Ludmilla Construction Company is composed of two divisions: (1) Home Construction and (2) Commercial Construction. The Home Construction Division is in the process of building 12 houses and the Commercial Construction Division is working on three projects. Cost items of the company follow:
Wages of workers assigned to a specific construction project
Supplies used by the Commercial Construction Division
Labor on a particular house
Salary of the supervisor of commercial construction projects
Supplies, such as glue and nails, used by the Home Construction Division
Cost of building permits
Materials used in commercial construction projects
Company president’s salary
Depreciation on crane used in commercial construction
Depreciation on home office building
Salary of corporate office manager
Required
- a. Identify each cost as being a direct or indirect cost assuming the cost objects are the individual products (houses or projects).
- b. Identify each cost as being a direct or indirect cost, assuming the cost objects are the two divisions.
- c. Identify each cost as being a direct or indirect cost assuming the cost object is Ludmilla Construction Company as a whole.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
question 3-5
7
al 15 Chapter Four
Activity Cost Pool
Machining
Machine setups
Production design.
General factory
Activity Measure
Machining
Required information
Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The
company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-
based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following
additional information is available for the company as a whole and for Products Y and Z:
Number of setups
Number of products.
Direct labor-hours
Activity Measure.
Machine-hours
Number of setups
Number of products
Direct labor-hours.
Activity rate
Saved
per setup
Estimated
Overhead Cost
$ 249,600
$ 162,400
$ 92,000
$ 309,600
4. What is the activity rate for the Machine Setups activity cost pool?
Product Y Product Z
8,800
3,200
40
240
1
1
8,800
3,200
S
15
Expected Activity
12,000 MHS
280 setups
of 15
2 products
12,000 DLHS…
Chapter 12 Solutions
SURVEY OF ACCOUNT.(LL)-W/ACCESS>CUSTOM<
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - LO 4-1Exercise 4-1A Direct versus indirect costs...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Exercise 4-4APooling overhead cost Ware...Ch. 12 - Prob. 5ECh. 12 - Exercise 4-5A Allocating overhead cost among...Ch. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Exercise 4-6AAllocating overhead costs among...Ch. 12 - Exercise 4-9AAllocating to solve a timing problem...Ch. 12 - Prob. 11ECh. 12 - Exercise 4-11AHow the allocation of fixed cost...Ch. 12 - Prob. 13ECh. 12 - Problem 4-17A Cost accumulation and allocation...Ch. 12 - Problem 4-18A Selecting an appropriate cost driver...Ch. 12 - Problem 4-19A Cost allocation in a service...Ch. 12 - Prob. 17PCh. 12 - Problem 4-21A Allocation to accomplish smoothing...Ch. 12 - Problem 4-22A Allocating indirect costs between...Ch. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - ATC 4-3 Research Assignment Using real-world data...Ch. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.arrow_forward4 pis Virgin River Inc. produces horse and rancher equipment. Costs from Support Department 1 are allocated based on the number of employees. Costs from Support Department 2 are allocated based on asset value. Relevant department information is provided in the following table. Using the sequential method of support department cost allocation, determine the total costs FROM Support Department 1 (assuming they are allocated first) that should be allocated to Support Department 2 AND to each of the production departments. Support Department 1 Support Department 2 Production Department 1 Production Department 2 Number of employees 6. 25 18 Asset value $1,150 $670 $6,230 $5,100 Department cost $20,000 $15,500 $99,000 $79,000 Edit Format Table 12pt v Paragraph BIUarrow_forwardCan you answer the questions in 17-3B #1-4arrow_forward
- QUESTION 38 Cost AccountingChoose the answer from the choicesarrow_forwardvi.4arrow_forwardProblem C-1A Applying activity-based costing LO P1, P2, A1 Skip to question [The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 310,000 Polishing $ 145,000 Product modification 550,000 Providing power $ 260,000 System calibration 560,000 Additional information on the drivers for its production activities follows. Grinding 17,000 machine hours Polishing 17,000 machine hours Product modification 1,500 engineering hours Providing power 15,000 direct labor hours System calibration 200 batches Problem C-1A Part 2 Job 3175 Job 4286 Number of units 150 units 1,875 units Machine…arrow_forward
- 3-34 Activity Levels and Cost Drivers Tartan Manufacturing Company produces four lines of high-quality lighting fixtures in a single manufacturing plant. Products are built to specific customer specifica- tions. All products are made-to-order. Management of the plant lists the following as the key activities at the plant: a. Product design b. Production scheduling c. Cost of purchasing department d. Receipt and inspection of materials e. Machine set-ups f. Product inspection, done for each product g. Plant security h. Customer credit check i. Machine operation j. Machine maintenance Required Identify a cost object and a cost driver for each activity.arrow_forwardA-2arrow_forward3arrow_forward
- Question 14 of 14 View Policies Current Attempt in Progress Direct labor costs Machine hours Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Setup hours < (a) Standard $50,000 1,500 Save for Later 90 Predetermined overhead rate eTextbook and Media 4 Total estimated overhead costs are $312,000. Overhead cost allocated to the machining activity cost pool is $210,000, and $102,000 is allocated to the machine setup activity cost pool. Custom Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.) AS $100,000 Safed out o pe como esped 1,500 420 SINBADO MINOX 0 110 % of direct…arrow_forwardkindly solve part 1 to 9arrow_forwardQuestion 6.4 Krum Lawn Equipment has five departments, of which Casting and Finishing are producing departments. Maintenance, Product Movement, and Inspection are service departments. The distribution of the service departments is as follows: Service Costs Services provided to: Maint. Prod. Move. Insp. Cast. Finish. Maintenance $84,000 5% 25% 50% 20% Product movement 160,000 10% 5 45 40 Inspection 38,000 15 5 20 60 Required Use the direct method to allocate the service departments' costs. Prepare a schedule showing the total costs allocated to each…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Fixed Asset Replacement Decision 1235; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=LJRzn9K8Nwk;License: Standard Youtube License