MANAGERIAL ACCOUNTING W/ACCESS
MANAGERIAL ACCOUNTING W/ACCESS
17th Edition
ISBN: 9781264362905
Author: Garrison
Publisher: MCG
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Chapter 9, Problem 4E
To determine

Flexible budget performance report: The statement which shows the performance of flexible budget by comparing with the actual results and the static budget is called a flexible budget performance report.

The Flexible budget performance report.

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Cariman Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Human Resources and Information Services).For the last quarter of 2020, Cariman’s cost records indicate the following:SUPPORT PRODUCTIONHuman Resources (HR)Information Services(IS)MachiningAssemblyTotalBudgeted overhead costs before any inter-department cost allocations$400,000$2,000,000$10,912,000$14,916,000$28,228,000Support work supplied by HR (Number of employees)025%40%35%100%Support work supplied by IS (Processing costs)10%030%60%100%Required:1. Allocate the two support departments’ costs to the two operating departments using the following methods:a. Direct method b. Step-down method (allocate HR first) c. Step-down method (allocate IS first) d. The Algebraic method.2. Compare and explain differences in the support-department costs allocated to each production department. 3. What approaches might be used to decide the sequence in which to allocate…
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