REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
16th Edition
ISBN: 9780134789705
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 15, Problem 15.18E
Dual-rate method, budgeted versus actual costs and quantities (continuation of 15-17).
Chocolat Inc. decides to examine the effect of using the dual-rate method for allocating truck costs to each round-trip. At the start of 2017, the budgeted costs were:
| Variable cost per round-trip | $ 1,350 |
| Fixed costs | $47,500 |
The actual results for the 45 round-trips made in 2017 were:
| Variable costs | $58,500 |
| Fixed costs | 38,250 |
| $96,750 |
Assume all other information to be the same as in Exercise 15-17.
- 1. Using the dual-rate method, what are the costs allocated to the dark chocolate division and the milk chocolate division when (a) variable costs are allocated using the budgeted rate per round-trip and actual round-trips used by each division and when (b) fixed costs are allocated based on the budgeted rate per round-trip and round-trips budgeted for each division?
- 2. From the viewpoint of the dark chocolate division, what are the effects of using the dual-rate method rather than the single-rate method?
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The following data were selected from the records of Fluwars Company for the year ended December 31, current year:
Balances at January 1, current year:
Accounts receivable (various customers)
$
111,500
Allowance for doubtful accounts
11,200
The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return.
The following transactions occurred during the current year:
Sold merchandise for cash, $252,000.
Sold merchandise to Abbey Corp; invoice amount, $36,000.
Sold merchandise to Brown Company; invoice amount, $47,600.
Abbey paid the invoice in (b) within the discount period.
Sold merchandise to Cavendish Inc.; invoice amount, $50,000.
Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.
Brown paid its account in full within the discount period.
Sold merchandise to Decca Corporation; invoice amount, $42,400.
Cavendish paid its account in full after the…
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Chapter 15 Solutions
REVEL for Horngren's Cost Accounting: A Managerial Emphasis -- Access Card (16th Edition) (What's New in Accounting)
Ch. 15 - Prob. 15.1QCh. 15 - Describe how the dual-rate method is useful to...Ch. 15 - How do budgeted cost rates motivate the...Ch. 15 - Give examples of allocation bases used to allocate...Ch. 15 - Why might a manager prefer that budgeted rather...Ch. 15 - To ensure unbiased cost allocations, fixed costs...Ch. 15 - Prob. 15.7QCh. 15 - What is conceptually the most defensible method...Ch. 15 - Distinguish between two methods of allocating...Ch. 15 - What are the challenges of using the incremental...
Ch. 15 - Prob. 15.11QCh. 15 - What is one key way to reduce cost-allocation...Ch. 15 - Describe how companies are increasingly facing...Ch. 15 - Distinguish between the stand-alone and the...Ch. 15 - Identify and discuss arguments that individual...Ch. 15 - Single-rate versus dual-rate methods, support...Ch. 15 - Single-rate method, budgeted versus actual costs...Ch. 15 - Dual-rate method, budgeted versus actual costs and...Ch. 15 - Support-department cost allocation; direct and...Ch. 15 - Support-department cost allocation, reciprocal...Ch. 15 - Direct and step-down allocation. E-books, an...Ch. 15 - Reciprocal cost allocation (continuation of...Ch. 15 - Allocation of common costs. Evan and Brett are...Ch. 15 - Allocation of common costs. Gordon Grimes, a...Ch. 15 - Revenue allocation, bundled products. Couture Corp...Ch. 15 - Allocation of common costs. Jim Dandy Auto Sales...Ch. 15 - Single-rate, dual-rate, and practical capacity...Ch. 15 - Prob. 15.28PCh. 15 - Fixed-cost allocation. Central University...Ch. 15 - Allocating costs of support departments; step-down...Ch. 15 - Support-department cost allocations;...Ch. 15 - Common costs. Tate Inc. and Booth Inc. are two...Ch. 15 - Prob. 15.33PCh. 15 - Support-department cost allocations;...Ch. 15 - Revenue allocation, bundled products. Boca Resorts...Ch. 15 - Support-department cost allocations; direct,...
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- Given the solution and accounting questionarrow_forwardThe following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000.Sold merchandise to Abbey Corp; invoice amount, $36,000.Sold merchandise to Brown Company; invoice amount, $47,600.Abbey paid the invoice in (b) within the discount period.Sold merchandise to Cavendish Inc.; invoice amount, $50,000.Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.Brown paid its account in full within the discount period.Sold merchandise to Decca Corporation; invoice amount, $42,400.Cavendish paid its account in full after the discount…arrow_forwardGiven solution general accountingarrow_forward
- answer plzarrow_forwardThe following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…arrow_forwardNonearrow_forward
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