To determine Ascertain the cost allocated using each method of allocation. Explanation a) Direct method: Compute the base for allocation: Departmental Cost Allocation Bases Particulars Maintenance Utilities Production A Production B Maintenance 25% 25% 50% Utilities 15% 40% 45% Table (1) Compute the total costs allocated: Maintenance Production A Production B Service percentage 25% 50% Allocation percentage 33.33% 66.67% Allocation amount ($115,000) $38,330 $76,671 Utilities Particulars Production A Production B Service percentage 40% 45% Allocation percentage 47.06% 52.94% Allocation amount ($65,000) $30,589 $34,411 Particulars Production A Production B Maintenance $38,330 $76,671 Utilities $30,589 $34,411 Total Amount Allocated $68,919 $111,082 Table (2) b) Split-off method: Compute the base for allocation: Departmental Cost Allocation Bases Particulars Maintenance Utilities Production A Production B Maintenance 25% 25% 50% Utilities 15% 40% 45% Table (3) Compute the total costs allocated: Particulars Utilities Production A Production B Service percentage 25% 25% 50% Allocation amount ($115,000) $28,750 $28,750 $57,500 Utilities Particulars Production A Production B Service percentage 40% 45% Allocation percentage 47.06% 52...

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Publisher: MCG/CREATE

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Chapter 7, Problem 38P

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Ascertain the cost allocated using each method of allocation.

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Chapter 7, Problem 37P

Chapter 7, Problem 39P

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Chapter 7 Solutions

COST MANAGMENT WITH CONNECT ACCESS

Ch. 7 - Prob. 1Q Ch. 7 - Explain the difference between joint products and...Ch. 7 - Prob. 3Q Ch. 7 - What are the three methods of departmental cost...Ch. 7 - Prob. 5Q Ch. 7 - Prob. 6Q Ch. 7 - Prob. 7Q Ch. 7 - What are the limitations of joint product and...Ch. 7 - Prob. 9Q Ch. 7 - Prob. 10Q

Ch. 7 - What is the amount of service department cost...Ch. 7 - Prob. 12BE Ch. 7 - Prob. 13BE Ch. 7 - Prob. 14BE Ch. 7 - Prob. 15BE Ch. 7 - Prob. 16BE Ch. 7 - Prob. 17BE Ch. 7 - Prob. 18BE Ch. 7 - Prob. 19BE Ch. 7 - Brief Exercises 7-17 through 7-20 require the...Ch. 7 - Prob. 21E Ch. 7 - Prob. 22E Ch. 7 - Prob. 23E Ch. 7 - Prob. 24E Ch. 7 - Great Ape Glassworks manufactures glass used for...Ch. 7 - Cost allocation is often the centerpiece of...Ch. 7 - Prob. 27E Ch. 7 - Prob. 28E Ch. 7 - Robinson Products Company has two service...Ch. 7 - Donation of blood through the American Red Cross...Ch. 7 - Tango Company produces joint products M, N, and T...Ch. 7 - Arkansas Corporation manufactures liquid chemicals...Ch. 7 - Webster Company produces 25,000 units of product...Ch. 7 - Marin Company produces two software products...Ch. 7 - Logan Products has two production...Ch. 7 - McKeoun Enterprises is a large machine tool...Ch. 7 - Barfield Corporation prepares business plans and...Ch. 7 - Solexx Corporation allocates its service...Ch. 7 - Prob. 39P Ch. 7 - Prob. 40P Ch. 7 - Prob. 41P Ch. 7 - Prob. 42P Ch. 7 - Prob. 43P Ch. 7 - Prob. 44P Ch. 7 - Prob. 45P Ch. 7 - Prob. 46P Ch. 7 - Prob. 47P Ch. 7 - Prob. 48P Ch. 7 - Prob. 49P Ch. 7 - Prob. 50P

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