Allocate the Company’s service department costs to its production departments using the direct method.

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Answer 1

Question

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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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

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Answer 2

Question

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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Answer 3

Question

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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Answer 4

Question

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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Answer 5

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.

Answer 6

Chapter 17, Problem 24P

1.

To determine

Allocate the Company’s service department costs to its production departments using the direct method.

Answer 7

Chapter 17, Problem 24P

1.

To determine

Allocate the Company’s service department costs to its production departments using the direct method.

Answer 8

2.

To determine

State the proper sequence for allocating the firm’s service department costs by the step-down method.

Answer 9

2.

To determine

State the proper sequence for allocating the firm’s service department costs by the step-down method.

Answer 10

3.

To determine

Allocate the company’s service department costs using the step-down method.

Answer 11

3.

To determine

Allocate the company’s service department costs using the step-down method.

Answer 12

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.

Answer 13

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.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 17 - Prob. 1RQ Ch. 17 - Prob. 2RQ Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQ Ch. 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

Allocate the Company’s service department costs to its production departments using the direct method.

Solution Summary: The author explains how to allocate the Company's service department costs to its production departments using the direct method.

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Allocate the Company’s service department costs to its production departments using the direct method.

State the proper sequence for allocating the firm’s service department costs by the step-down method.

Allocate the company’s service department costs using the step-down method.

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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Chapter 17 Solutions