A retailer pays $140,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. Department Jewelry Cosmetics Department Housewares Tools Shoes First Floor Jewelry Department. Cosmetics Department Totals Second Floor Housewares Department Square feet occupied 1,610 (first-floor) 2,990 (first-floor) The company allocates $84,000 of total rent expense to the first floor and $56,000 to the second floor. It then allocates rent expense for each floor to the departments on that floor based on square feet occupied. Determine the rent expense to be allocated to each department. Tools Department Shoes Department Totals Square feet occupied 1,932 (second-floor) 690 (second-floor) 1,978 (second-floor) Square Feet Square Feet 0 0 Percent of Total % % 0% Percent of Total % % % 0 % Cost Allocated $ Cost Allocated $ 0 0

A retailer pays $140,000 rent each year for its two-story building. Space in this building is occupied by five departments as shown here. Department Jewelry Cosmetics Department Housewares Tools Shoes First Floor Jewelry Department. Cosmetics Department Totals Second Floor Housewares Department Square feet occupied 1,610 (first-floor) 2,990 (first-floor) The company allocates $84,000 of total rent expense to the first floor and $56,000 to the second floor. It then allocates rent expense for each floor to the departments on that floor based on square feet occupied. Determine the rent expense to be allocated to each department. Tools Department Shoes Department Totals Square feet occupied 1,932 (second-floor) 690 (second-floor) 1,978 (second-floor) Square Feet Square Feet 0 0 Percent of Total % % 0% Percent of Total % % % 0 % Cost Allocated $ Cost Allocated $ 0 0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
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Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,000 for the Sleepeze, 12,000 for the Plushette, and 5,000 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at 65,000, a marketing research assistant at 40,000, and an administrative assistant at 25,000) are budgeted for 130,000 next year. b. Depreciation on the offices and equipment is 20,000 per year. c. Office supplies and other expenses total 21,000 per year. d. Advertising has been steady at 20,000 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 15 percent of first-year Ultima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged 50 per unit sold. Gene expects the Ultima line to ship for 75 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Prepare a revenue budget for the Sales Division for the coming year for each scenario. 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above.
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A retailer pays $130,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Department Square feet occupied Jewelry . 1,440 (first-floor) Cosmetics . 3,360 (first-floor) Housewares . 2,016 (second-floor) Tools . 960 (second-floor) Shoes . 1,824 (second-floor) The company allocates 65% of total rent expense to the first floor and 35% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupied. Determine the rent expense to be allocated to each department.
A retailer pays $130,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here.
Lalia rents 110,000 square feet of store space for $358,000 per year. The amount of square footage by department is shown below: Department A 45,000 square feet Department B 30,000 square feet Department C 18,000 square feet Department D 17,000 square feet Help allocate the annual rent expense among the four departments on the basis of relative square feet of floor space occupied.