Connect 1-Semester Access Card for Managerial Accounting: Creating Value in a Dynamic Business Environment (NEW!!)
11th Edition
ISBN: 9781259727788
Author: Hilton & Platt
Publisher: MCG
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Chapter 17, Problem 24P
1.
To determine
Allocate the Company’s service department costs to its production departments using the direct method.
2.
To determine
State the proper sequence for allocating the firm’s service department costs by the step-down method.
3.
To determine
Allocate the company’s service department costs using the step-down method.
4.
To determine
Prepare an excel sheet for the given detail in requirement (1) and (3), assume that the budgeted variable costs in the three departments are $60,000, $70,000, and $55,000, respectively.
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Nanda Company has two service departments, Maintenance and Personnel. Maintenance
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Shilongo Ltd uses costing to attribute costs to individual products and services provided
to its customers. It has begun the preparation of its fixed production cost budget for the
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The following costs have been produced:
Machining Assembly Finishing Stores Maintenance
2,500 1,500 1,000
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6,000
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The number of machine and labor hours budgeted for the forthcoming period is
budgeted as follows:-
Machining Assembly Finishing
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40
50
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100
300
200
Overheads are absorbed in Assembly and Finishing departments on a Labor hour
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It has been estimated that service departments usage is as follows:
Machining Assembly Finishing Stores Maintenance
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55%
20%
20%
5%
- Stores
40%
30%
20%
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Required:
b) Calculate the overhead…
Shilongo Ltd uses costing to attribute costs to individual products and services provided
to its customers. It has begun the preparation of its fixed production cost budget for the
forthcoming period. The company three production departments Machining, Assembly
and Finishing; and two service departments Stores and Maintenance.
The following costs have been produced:
Machining Assembly Finishing Stores Maintenance
2,500 1,500 1,000
Overhead cost $
6,000
800
The number of machine and labor hours budgeted for the forthcoming period is
budgeted as follows:-
Machining Assembly Finishing
Machine hours
500
40
50
Labor hours
100
300
200
Overheads are absorbed in Assembly and Finishing departments on a Labor hour
basis; and in Machining departments they are absorbed on a machine hour basis.
It has been estimated that service departments usage is as follows:
Machining Assembly Finishing Stores Maintenance
Maintenance
55%
20%
20%
5%
- Stores
40%
30%
20%
10%
Required:
c) Prepare a quotation for…
Chapter 17 Solutions
Connect 1-Semester Access Card for Managerial Accounting: Creating Value in a Dynamic Business Environment (NEW!!)
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
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