Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 5, Problem 1CMA
To determine
Identify the number of hours the
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The Woodridge Manufacturing Company has two Production Departments: Cutting and Pasting. Each of these two departments uses the services provided by the Computing and Maintenance Departments, which both support the production functions and each other’s functions as well. Woodridge uses the step method of allocating these service department costs to the production departments. Computing is allocated on the basis of hours of department operations and Maintenance is allocated on the basis of departmental direct labor hours. Last period the following costs were recorded:
Cutting Department overhead
$400,000
Pasting Department overhead
$600,000
Computing Department total costs
$700,000
Maintenance Department total costs
$300,000
Production Department data:
Cutting
Pasting
Computing
Maintenance
Hours of operation
5,000
7,500
15,000
2,500
Direct labor hours recorded
4,000
8,000
4,000
8,000
Required:
a. Determine the…
Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours.
Department
Total Labor-Hours
Square Feet of Space Occupied
Number of Employees
Machine-Hours
Direct Labor-Hours
Personnel
16,400
12,600
27
Custodial Services
8,600
3,900
49
Maintenance
14,300
10,200
65
Printing
30,600
40,300
109
162,000
13,000
Binding
101,000
21,000
307
41,000
80,000
170,900
88,000
557
203,000
93,000
Budgeted overhead costs in each department for the current year are shown below:
Personnel
$ 320,000
Custodial Services
65,300
Maintenance
93,300…
The Sunland Company makes wheels and wings for ground transport vehicles and drones. In addition to the key manufacturing
departments, Sunland 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
$136,000 $75,000
1,200
2,000
900
Operating Departments
Wheels
Wings
$413,000 $702,000
2,400
2,565
5,600
1,935
Totals
$1,326,000
11,200
5,400
Chapter 5 Solutions
Managerial Accounting
Ch. 5 - Why are support department costs difficult to...Ch. 5 - Why does support department cost allocation matter...Ch. 5 - What are some drawbacks of applying support...Ch. 5 - Why is the diect method of support department cost...Ch. 5 - How does management determine the order in which...Ch. 5 - Are large or small companies more likely to use...Ch. 5 - What is the main difference between the physical...Ch. 5 - When would management most likely use the net...Ch. 5 - What are the two most often used ways of...Ch. 5 - How can support department and joint cost...
Ch. 5 - Charlies Wood Works produces wood products (e.g.,...Ch. 5 - Bucknum Boys, Inc., produces hunting gear for buck...Ch. 5 - Prob. 3BECh. 5 - Blakes Blacksmith Co. produces two types of...Ch. 5 - Garys Grooves Co. produces two types of carving...Ch. 5 - Prob. 6BECh. 5 - Yo-Down Inc. produces yogurt. Information related...Ch. 5 - Prob. 2ECh. 5 - Blue Africa Inc. produces laptops and desktop...Ch. 5 - Christmas Timber, Inc., produces Christmas trees....Ch. 5 - Crystal Scarves Co. produces winter scarves. The...Ch. 5 - Davis Snowflake Co. produces Christmas stockings...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Support department cost allocation comparison...Ch. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Joint cost allocation market value at split-off...Ch. 5 - Joint cost allocation net realizable value method...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Joint cost allocation-market value at split-off...Ch. 5 - Joint cost allocation net realizable value method...Ch. 5 - Support department cost allocation Blue Mountain...Ch. 5 - Support activity cost allocation Jakes Gems mines...Ch. 5 - Joint cost allocation Lovely Lotion Inc. produces...Ch. 5 - Joint cost allocation Florissas Flowers jointly...Ch. 5 - Support department cost allocation Hooligan...Ch. 5 - Support activity cost allocation Kizzles Crepes...Ch. 5 - Joint cost allocation McKenzies Soap Sensations,...Ch. 5 - Prob. 4PBCh. 5 - Analyze Milkrageous, Inc. Milkragcous, Inc., a...Ch. 5 - Analyze Horsepower Hookup, Inc. Horsepower Hookup,...Ch. 5 - Prob. 3MADCh. 5 - Prob. 4MADCh. 5 - Joint cost allocation and performance evaluation...Ch. 5 - Prob. 3TIFCh. 5 - Prob. 1CMACh. 5 - Adam Corporation manufactures computer tables and...Ch. 5 - Breegle Company produces three products (B-40,...Ch. 5 - Tucariz Company processes Duo into two joint...
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