Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 19, Problem 7E
Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:
Allocate the support department costs to the production departments using the direct method.
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Prism Company has two service departments: security departments and maintenance departments that give services to two producing departments: machining department and assembling department. Security department costs will be allocated using the number of employees and maintenance department costs will be allocated using direct labor hours. For calculation of predetermined rate, machine hours and direct labor hours are used for machining and assembling departments, respectively.
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cost after cost allocation:
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30000
60000
44000
70000
204000
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30000
25000
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69000
100000
299000
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300
450
250
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9
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Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's
three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below:
Processing
Supervising
Other
Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of
batches. The costs in the other activity cost pool are not assigned to products. Activity data appear below:
Product MO
Product M5
Total
$ 3,800
$ 23,800
$ 10,400
MHs (Processing)
9,700
300
10,000
Sales (total)
Direct materials (total)
Direct labor (total)
Batches
(Supervising)
500
500
1,000
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Product Mº
$ 74,100
$ 28,500
$ 27,800
Product M5
$ 89,900
$ 31,400
$ 41,700
Chapter 19 Solutions
Financial And Managerial Accounting
Ch. 19 - Why are support department costs difficult to...Ch. 19 - Why does support department cost allocation matter...Ch. 19 - What are some drawbacks of applying support...Ch. 19 - Why is the diect method of support department cost...Ch. 19 - How does management determine the order in which...Ch. 19 - Are large or small companies more likely to use...Ch. 19 - What is the main difference between the physical...Ch. 19 - When would management most likely use the net...Ch. 19 - What are the two most often used ways of...Ch. 19 - How can support department and joint cost...
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