Direct costsSquare footageNumber of employeesAMaintenance$126,000800$36,000$42,750HamanResources$64,00040012Q ZoomMixing Finishing$105,000$175,0001,2001,6002432Lola Corporation consist of two servicedepartments, Maintenance and HumanResources. John Company also has twoproduction departments, Mixing and Finishing.Maintenance costs are allocated based onsquare footage while Human Resources costsare allocated based on number of employees.The following information has been gatheredfor the current year:If the step-down method is used to allocateservice department costs, and theMaintenance Department is allocated first, theamount of costs allocated from theMaintenance Department to the MixingDepartment isB$63,000$42,000

The step-down method allocates the services departments simultaneously, one by one. If the cost of a…

Answered: Direct cont Square footage Number of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

See similar textbooks

Similar questions

Riemer, Incorporated has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.) Department Direct Expenses Square Feet Employees Maintenance $ 18,000 900 10 Cutting 21,000 1,400 10 Assembly 61,000 2,400 10 Packaging 2,400 3,400 10
Fran Ferry company had the following activities, pooled costs, and physical flow of driver units. The company uses activity-based costing. Activities Pooled Cost Physical flow of Driver Units Account Inquiry (hours) $200,000 5000 (hours) Account billing (Lines) $140,000 2,000,000 lines Account Verification (accounts) $5,000 20,000 accounts Correspondence (letters) $25,000 2,000 letters The above activities are used by departments A and B as follows: Department A Department B Account Inquiry (hours) 1,000 2,000 Account Billing (Lines) 200,000 100,000 Account Verification (accounts) 5,000 4,000 Correspondence…
Lion Corporation uses an activity-based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense Equipment depreciation Distribution of Resource Consumption Across Activity Cost Pools: Product C9 $ 47,000 Product UO $ 6,000 Total Supervisory expense 0.60 Activity Cost Pools O $18.00 per MH O $5.30 per MH O $2.82 per MH O $3.18 per MH Mac 0.60 In the second stage, Machining costs are assigned to products using machine- hours (MHS) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: 6,900 Order Filling 3,100 0.10 MHS (Machining) 10,000 b.20 200…
Direct Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Support Departments Producing Departments Human Resources $160,000 General Factory $360,000 Fabricating Assembly $114,200 $95,000 60 45 80 1,500 6,000 14,000 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. Chekov Company uses the direct method of support department cost allocation. Required: 1. Calculate the allocation ratios for the four departments using the direct method. If an amount is zero, enter "0". Round your answer to the nearest cent. Proportion of Driver Used by Human Resources Human Resources General Factory General Factory Fabricating Assembly 2. Using the direct method, allocate the costs of the…
Direct Method of Support Department Cost Allocation 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 $170,000 $350,000 $114,800 $95,000 Normal activity: Number of employees — 60 80 170 Square footage 1,000 — 5,700 13,300 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. Required:
Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,700 2600 Account billing (lines) $55,000 35,000 Account verification (accounts) $40,250 27,500 Correspondence (letters) $80,000 12,000 Potter & Weasley uses activity based costing.The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 200 1000 Account billing (lines) 10,000 4,000 Account verification (accounts) 6,000 7,000 Correspondence (letters) 1,000 2,000 How much of the account inquiry cost will be assigned to Department Q? Question 15 options: $1318 $32,962 $6592 $13,000
A company has two production departments, Cutting and Finishing and two service departments, Quality Control and Maintenance. Selected information on the four departments is given below: Cutting Finishing Quality Control Maintenance Direct cost P400,000 P240,000 P120,000 P180,000 No of inspection 4000 16,000 Machine hours 40,000 20,000 Quality control department costs are allocated on the basis of number of inspections. Maintenance department costs are allocated on the basis of number of machine hours Under the direct method, the amount of quality control costs allocated to the cutting department is O 424000 O 24000 96000 O 296000
ABC; pricingChester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Costs Activity Drivers Utilities $1,440,000 90,000 machine hours Scheduling and setup 1,310,400 1,170 setups Material handling 3,072,000 2,400,000 pounds of material The company’s products and other operating statistics follow. Product A Product B Product C Direct costs $96,000 $96,000 $108,000 Machine hours 45,000 15,000 30,000 Number of setups 195 570 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000 b. Before it installed an ABC system, Chester used a traditional costing system that allocated factory overhead to products using direct labor hours. The firm operates in a competitive market and sets product prices at cost plus a 25 percent markup.…
ABC; pricingChester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Costs Activity Drivers Utilities $1,440,000 90,000 machine hours Scheduling and setup 1,310,400 1,170 setups Material handling 3,072,000 2,400,000 pounds of material The company’s products and other operating statistics follow. Product A Product B Product C Direct costs $96,000 $96,000 $108,000 Machine hours 45,000 15,000 30,000 Number of setups 195 570 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000 a. Calculate the unit cost for each product using the appropriate cost drivers for each product.Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Product C Unit cost Answer Answer Answer b.…
John Company has two service departments, Maintenance and Human Resources. John Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The information given below has been gathered for the current year. If the direct method is used to allocate service department costs, then the total cost of the Mixing Department after allocation would be Human Resources Maintenance $126,000 800 8. Mixing S105,000 1,600 24 Finishing $175,000 1,200 32 Direct costs $84,000 Square footage Number of employees 400 12 $108,000 O $213,000 O $199,500 O $36,000 $105,000
Sequential (Step) Method of Support Department Cost Allocation Chekov 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 $165,000 $380,000 $114,200 $90,000 Normal activity: Number of employees — 40 70 150 Square footage 1,800 — 5,500 13,200 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. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded…
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Activity Cost Pools Machining Setting Up Other Total Equipment depreciation $ 10,400 $ 51,200 $ 24,800 $ 86,400 Indirect labor 6,000 3,400 4,600 14,000 Total $ 16,400 $ 54,600 $ 29,400 $ 100,400 Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below: MHs Batches Product Z3 6,500 1,000 Product T1 6,700 1,600 Total 13,200 2,600 Product Z3 Product T1 Sales (total) $ 240,800 $ 260,500…

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

SEE MORE TEXTBOOKS