Chapter 6, Problem 6.2P

Listed below are several costs incurred in the loan department of Suwanee Bank and Trust Company. For each cost, indicate which of the following classifications best describe the cost. More than one classification may apply to the same cost item.Cost Classificationsa. Controllable by the loan department managerb. Uncontrollable by the loan department managerc. Direct cost of the loan departmentd. Indirect cost of the loan departmente. Differential costf. Marginal costg. Opportunity costh. Sunk costi. Out-of-pocket costCost Items1. Salary of the loan department manager.2. Cost of office supplies used in the loan department.3. Cost of the department’s desktop computers purchased by the loan department manager last year.4. The portion of general advertising cost of the bank that has been allocated to the loan department.5. Revenue that the loan department would have generated for the bank if a branch loan office had been located downtown instead of in the next county.6. Difference in the…

Which costing system is extensively used in the service industry for hospitals, law firms, or accounting firms? Explain why.

a. Using the step method to allocate the service center costs, What is the total cost of Programming and classes?b. Using the direct method of allocating service center costs, Compute the total cost of Individual Fitnessc.Using the algebraic method of allocating service center costs Determine the total costs of Programming and Classes

When using the sequential distribution method of distributing service department costs, if each of two service departments services the same number of other departments, how is it determined as to which service department to allocate first?

Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar's Department, and the Computer Services Department. The comptroller has compiled the following data for the year just ended. Department Annual Cost Admissions $ 118,000 Registrar 197,000 Computer Services 420, 000 Division Budgeted Enrollment Budgeted Credit Hours Planned Courses Requiring Computer Work Liberal Arts 1,100 31,000 12 Sciences 850 28,750 25 Business Administration 750 22,750 25 Required: 1. Distribute the departmental costs to the college's three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments:Recuired: Dustroule the depurtmerital costs to the collegels three dwaish based on the allocation bus ghen Chose the betier aliscation base for distr buting the cost to the…

Using the dual-rate method, compute the amount allocated to each department when (a) the fixedcost rate is calculated using budgeted fixed costs and the practical gift-wrapping capacity, (b) fixed costs are allocated based on budgeted fixed costs and budgeted usage of gift-wrapping services, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage.

Identifying Direct and Indirect Costs Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an

Am. 369.

Case Questions and Answers  1. Identify the services and/or programs to be included in the cost and profitability analysis. Infant childcare Toddler childcare Pre-K childcare Rent - School district Rent - Head Start 2. Examine the costs listed in Table 2. a. Identify the direct costs associated with each service or program. Labor costs are the only direct costs associated with the programs. Food costs would be direct costs to the kitchen area but indirect to the end services. b. Which costs would be organization- or facility-sustaining costs? Provide an argument for or against assigning these costs to services or programs. The costs that would be considered to be organizationsustaining costs include depreciation, building insurance, and interest expense on the mortgage debt. Both ACDC and the tenants use the facility and, thus, should participate in the costs associated with acquiring the space.  3. Identify the broad activity categories and create cost pools by assigning the costs…