In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method. Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

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Answer 1

Question

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

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Computing departmental overhead allocation rates The Oakman Company (see Short Exercise S19-1) has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $510,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 170,000. The estimated costs for the Packaging Department, $300,000, will be allocated based on machine-hours, and the estimated machine hours for the year are 40,000. In October, the company incurred 38,000 direct labor hours in the Mixing Department and 10,000 machine hours in the Packaging Department. Requirements Compute the predetermined overhead allocation rates. Round to two decimal places. Determine the total amount of overhead allocated in October.

Accounting Question 3 Barns Ltd. has three production departments: A, B, and C, and two service departments: Stores and Maintenance. The company absorbs its overhead costs on a machine hour basis in depts. A and B, and a labour hour basis in department C. The entity apportions indirect wages using labour hours worked in each department. The company has budgeted its production overhead costs for the forthcoming year as follows: Indirect wages Depreciation of plant Rent Power Canteen costs Plant insurance The following information is also available: Labour Hours Plant value Floor area (sq. m) Machine hours Employees Stores requisitions KWH ('000) A 9,000 $130,000 40,000 Material Direct Labour A Direct Labour B Direct Labour C 12,000 75 10,000 Machine hours A Machine hours B $ 96,000 376,000 147,000 72,000 123,000 117,500 100 B C 7,000 16,000 $70,000 $20,000 30,000 20,000 15,000 60 8,000 60 5,000 50 2,000 60 Stores Main. 4,000 4,000 $5,000 $10,000 10,000 5,000 nil 8 nil 40 kilos @ $5 per…

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResources GeneralFactory Fabricating Assembly Direct costs $160,000 $320,000 $114,500 $96,000 Normal activity: Number of employees ― 75 35 65 Square footage 1,600 ― 3,750 11,250 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Valron Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 85,000 machine hours. The Assembly Department…

Answer 2

Question

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Expert Solution & Answer

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Answer 3

Question

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Expert Solution & Answer

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Answer 5

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Answer 6

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

Answer 7

Chapter IE, Problem 14IE

1.

To determine

In the step-down method of cost allocation, the service department costs are to be allocated in a particular sequence wherein those costs incurred in the service department, which is first in the sequence, will be allocated among those service departments that used the services of that service department. Similarly, the service departments which are next in the sequence are treated the same way and thus, the allocation among the departments is performed in this manner under the step-down method.

Total costs after allocation by using the step-down method, and predetermined overhead rates in machining and assembly.

Answer 8

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

Answer 9

2.

To determine

The direct method of allocating cost is the method of allocating the service department costs to the departments’ parts of the business. In the direct method of cost allocation, the costs of the service department are allocated to the production department but these costs are not allocated to the rest of the service departments.

Total costs after allocation by using the direct method, and predetermined overhead rates in machining and assembly.

Answer 10

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

Answer 11

3.

To determine

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate

Answer 12

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Answer 13

4.

To determine

Cost allocation is a process of assigning or allocating indirect costs to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

The total overhead allocated by using the step-down method,

The total overhead allocated by using the direct method,

The total overhead allocated by using the plantwide rate.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. IE - Prob. 1IE Ch. IE - Prob. 2IE Ch. IE - INTEGRATION EXERCISE 3 Absorption Costing....Ch. IE - Prob. 4IE Ch. IE - Prob. 5IE Ch. IE - Prob. 6IE Ch. IE - Prob. 7IE Ch. IE - Prob. 8IE Ch. IE - Prob. 9IE Ch. IE - Prob. 10IE

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base. Plantwide overhead rate

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Chapter IE Solutions

Cost allocation is a process of assigning or allocating indirect cost to each and every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

Plantwide overhead rate