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 5E
Crystal Scarves & Co. produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table:
Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department.
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Time Clock Shop manufactures clocks on an automated assembly line. It utilizes two cost categories: direct materials and conversion costs. Each product must pass through the Assembly
Department and the Testing Department. Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production. The company
uses weighted-average costing.
Data for the Assembly Department are given in the table.
(Click the icon to view the table.)
What is the total amount debited to the work-in-process account during the month of June at Time Clock Shop?
A. $450,000
B. $2,270,000
C. $3,250,000
D. $2,000,000
E. $2,450,000
Table
Work in process, beginning inventory
Direct materials (100% complete)
Conversion costs (50% complete)
Units started during June
Work in process, ending inventory
Direct materials (100% complete)
Conversion costs (75% complete)
Work in process, beginning inventory
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Martay Creations produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table:
Department
Total Cost
Number of Employees
Machine Hours
Square Feet
Maintenance Department
$2,200
5
40
600
Security Department
4,500
3
0
500
Cutting Department
21,200
21
3,600
2,400
Sewing Department
24,900
19
5,400
3,000
Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department.
Line Item Description
CuttingDepartment
SewingDepartment…
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...
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