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 4E
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 20 and 60 trees, respectively, in them at one time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.
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Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 20 and 60 trees, respectively, in them at one time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a
cutting and pruning process. Machine maintenance and janitorial labors are performed
throughout the production process by nonproduction employees. Maintenance and
janitorial costs are allocated based on machine hours used and the number of trees in
each department, respectively. The company estimates that the cutting and pruning areas
typically have about 20 and 60 trees, respectively, in them at one time. The company also
estimates that the cutting process requires about 9 times as many machine hours as the
pruning process. The total costs of each department are as follows:
Maintenance Department
$ 7,800
Janitorial Department
5,000
Cutting Department
54,500
Pruning Department
11,000
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 18 and 72 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
Line Item Description
Amount
Maintenance Department
$8,000
Janitorial Department
6,000
Cutting Department
57,000
Pruning Department
8,000
Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.…
Chapter 5 Solutions
Managerial Accounting
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