FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
15th Edition
ISBN: 9781265564483
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 24, Problem 5QS
Basis for cost allocation
C1
For each of the following types of indirect and service department Expenses, identify one allocation basis that could be used to distribute it to the departments indicated.
______Computer service expenses of production scheduling for operating departments.
______General office department expenses of the operating departments.
______Maintenance department expenses of the operating departments.
______Electric utility expenses of all departments.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
In each blank next to the following types of indirect expenses and service department expenses, place the identifying letter of the best allocation basis to use to distribute it to the departments indicated.
Hh1.
Account
The Bramble Company makes wheels and wings for ground transport vehicles and drones. In addition
to the key manufacturing departments, Bramble needs two key support services, provided by its
Maintenance and IT departments.
The Maintenance costs are allocated to other departments based on the square footage of space each
department occupies. The IT department allocates its costs to other departments based on the amount
of time the IT employees spend assisting the other departments. The cost information of all four
departments, along with their usage information for both allocation bases, is as follows.
Initial cost
Square feet occupied
IT labor hours used
Support Departments
Maintenance
IT
$120.000 $74.000
1,100
1.800
1,100
Operating Departments
Wheels
$396,000
2,160
2,280
Wings
$700,000
5,040 h
1.720
Totals
$1,290,000
10,100
5,100
Chapter 24 Solutions
FUNDAMENTAL ACCT PRIN TEXT+CONNECT CODE
Ch. 24 - Prob. 1DQCh. 24 - What is the difference between operating...Ch. 24 - What are controllable costs?Ch. 24 - Prob. 4DQCh. 24 - Prob. 5DQCh. 24 - Prob. 6DQCh. 24 - Prob. 7DQCh. 24 - What is the difference between direct and indirect...Ch. 24 - Prob. 9DQCh. 24 - Prob. 10DQ
Ch. 24 - Prob. 11DQCh. 24 - Prob. 12DQCh. 24 - Prob. 13DQCh. 24 - Prob. 14DQCh. 24 - Prob. 15DQCh. 24 - Prob. 16DQCh. 24 - Prob. 17DQCh. 24 - Prob. 18DQCh. 24 - Prob. 19DQCh. 24 - Prob. 20DQCh. 24 - Prob. 1QSCh. 24 - Prob. 2QSCh. 24 - Prob. 3QSCh. 24 - Allocation and measurement terms C1 In each blank...Ch. 24 - Basis for cost allocation C1 For each of the...Ch. 24 - Prob. 6QSCh. 24 - Prob. 7QSCh. 24 - Prob. 8QSCh. 24 - Prob. 9QSCh. 24 - Prob. 10QSCh. 24 - Prob. 11QSCh. 24 - Prob. 12QSCh. 24 - Prob. 13QSCh. 24 - Prob. 14QSCh. 24 - Prob. 15QSCh. 24 - Prob. 16QSCh. 24 - Prob. 17QSCh. 24 - Prob. 18QSCh. 24 - Prob. 19QSCh. 24 - Prob. 1ECh. 24 - Prob. 2ECh. 24 - Exercise 24-3 Service department expenses...Ch. 24 - Prob. 4ECh. 24 - Prob. 5ECh. 24 - Prob. 6ECh. 24 - Prob. 7ECh. 24 - Prob. 8ECh. 24 - Prob. 9ECh. 24 - Prob. 10ECh. 24 - Prob. 11ECh. 24 - Prob. 12ECh. 24 - Prob. 13ECh. 24 - Prob. 14ECh. 24 - Prob. 15ECh. 24 - Prob. 16ECh. 24 - Prob. 17ECh. 24 - Prob. 18ECh. 24 - Prob. 19ECh. 24 - Prob. 20ECh. 24 - Prob. 21ECh. 24 - Problem WA
Responsibility according perfortmance...Ch. 24 - Prob. 2APSACh. 24 - Prob. 3APSACh. 24 - Problem 24-4A Departmental contribution to income...Ch. 24 - Prob. 5APSACh. 24 - Prob. 1BPSBCh. 24 - Prob. 2BPSBCh. 24 - Prob. 3BPSBCh. 24 - Prob. 4BPSBCh. 24 - Prob. 5BPSBCh. 24 - Prob. 24SPCh. 24 - Prob. 1BTNCh. 24 - Prob. 2BTNCh. 24 - Prob. 3BTNCh. 24 - Prob. 4BTNCh. 24 - Prob. 5BTNCh. 24 - Prob. 6BTNCh. 24 - Prob. 7BTNCh. 24 - Prob. 8BTNCh. 24 - Prob. 9BTN
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
- How does management determine the order in which support department costs are allocated under the sequential method?arrow_forwardHow are overhead expenses allocated to particular departments? A. Strictly based on floor space B. Based on a ratio of space to sales volume C. Strictly based on sales volume D. By floor space or sales volume Please provide proper explanationarrow_forwardKaren Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Cost Allocation Base Supervision Utilities $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet 66,500 9,500 95,000 19,000 Asset Values 58 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 70 64 Total 200 190,000 $69,000 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use this information to allocate…arrow_forward
- A department’s conversion costs are equal to the ________ and assigned direct labor costs. Select answer from the options below A. sum of its allocated overhead costs B. difference between its materials costs C. sum of its materials costs D. difference between its allocated overhead costsarrow_forward1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department. A. Using employee headcount as the allocation base. B. Using occupied space as the allocation base. C. Using productive capacity as the allocation base. D. Using the 3-year average use as the allocation base.arrow_forwardThe direct method as used is one method that can be used to re-assign service department cost.Discuss two other methods that can be used to re-assign service department overheads.arrow_forward
- 1. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much is the total overhead amount of Service Department E to be allocated? 2. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much of the total overhead amount of Service Department F is to be allocated to Producing Department C ? 3. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much of the total overhead amount of Service Department F is to be allocated to Producing Department D ?arrow_forwardS1 - After service department costs are allocated to other departments, costs are re-circulated back to that service department, under the step method. S2 - When using the direct method of allocating service department costs, it is necessary that the cost of the service department which serves the greatest number of departments is allocated first. a. Only S1 is true b. Only S2 is true c. Both S1 & S2 are true d. Both S1 & S2 are falsearrow_forwardWhat are the differences between single and dual rate allocation? Explain with suitable examples. b) Provide a numerical example for single rate allocation and dual rate allocation and explain the process of allocating support department costs to the operating department, assuming that: The company has two support departments “S1 & S2” and two operating departments “O1 & O2.” The company use the direct method to allocate support department costs. Note: You are required to provide numerical examples assuming the values of your own and they should not be copied from any sources.arrow_forward
- D1. Accountarrow_forward[The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total $ 45,000 25,000 10,000 $ 80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Housewares Sporting Total Square Feet 1,440 2,560 4,000 Sales $ 370,000 130,000 $ 500,000 Value of Insured Assets $59,000 41,000 $ 100,000 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods.arrow_forwardWhich of the following is referred to as the second stage of cost allocation? O The allocation of operating department costs to goods or services produced O The allocation of direct department costs to indirect departments O The allocation of service department costs to production departments O The allocation of support department costs to goods or services produced • Previousarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License