PLS ANSWER AND SHOW SOLUTION d.4.8020.00A summary of the usage of the service department services by other servicedepartments as well as by the two producing departments is as follows:EquipmentService Cost Center Supervision Maintenance Occupancy Dept.1 Dept. 2BuildingProduction Dept.SupervisionEquipment maint.Building occunpany 10%Direct costs in the various departments are as follows:10%5%40%45%45%55%10%35%45%Direct CostP 35,00030,00090,000350,000450,00020. If the direct method of allocation is used, how much of the supervisiondepartment's cost would be allocated to the building occupancy department?DepartmentSupervisionEquipment maintenanceBuilding occupancyProduction Dept. No. 1Production Dept. No. 2LabelSIS2S3P1P2(Start with Building occupancy, then Supervision)а.b. P 1,750P 3,500d. P5.250с.

We first need to understand the meaning of direct method of cost allocation. In this method, cost of…

A summary of the usage of the service department services by other service departments as well as by the two producing departments is as follows: Equipment Building Production Dept. Dept. I Dept. 2 40% Service Cost Center Supervision Maintenance Occupancy Supervision Equipment maint. Building occunpany 10% Direct costs in the various departments are as follows: 10% 5% 45% 45% 55% 10% 35% 45% Department Supervision Equipment maintenance Building occupancy Production Dept. No. 1 Production Dept. No. 2 Direct Cost 35,000 30,000 90,000 350,000 450,000 Label SI S2 S3 P1 P2 20. If the direct method of allocation is used, how much of the supervision department's cost would be allocated to the building occupancy department? (Start with Building occupancy, then Supervision) а. b. P 1,750 P 3,500 d. P5.250 с.

A summary of the usage of the service department services by other service departments as well as by the two producing departments is as follows: Equipment Building Production Dept. Dept. I Dept. 2 40% Service Cost Center Supervision Maintenance Occupancy Supervision Equipment maint. Building occunpany 10% Direct costs in the various departments are as follows: 10% 5% 45% 45% 55% 10% 35% 45% Department Supervision Equipment maintenance Building occupancy Production Dept. No. 1 Production Dept. No. 2 Direct Cost 35,000 30,000 90,000 350,000 450,000 Label SI S2 S3 P1 P2 20. If the direct method of allocation is used, how much of the supervision department's cost would be allocated to the building occupancy department? (Start with Building occupancy, then Supervision) а. b. P 1,750 P 3,500 d. P5.250 с.

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 19E: Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally...

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Refer to Cornerstone Exercise 7.3. Now assume that Valron 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. 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. (Round all allocated costs to the nearest dollar.) 3. What if the allocation ratios in Requirement 1 were rounded to six significant digits rather than four? How would that affect any rounding error in the allocation of costs?
Activity-based costing in an insurance company Umbrella Insurance Company carries three major lines of insurance: auto, workers' compensation, and homeowners. The company has prepared the following report for 20Y2: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records and are shown below. a.Complete the product profitability report through the administrative activities. b.Determine the underwriting income as a percent of premium revenue. C.Determine the Operating income as a percent of premium revenue, rounded to one decimal place. d.Interpret the report.
Refer to Cornerstone Exercise 7.3 and 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 82,000 machine hours. The Assembly Department overhead rate is based on normal activity of 160,000 direct labor hours. Job 316 required six machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost 120, and total direct labor cost was 80. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. (Round overhead rates to the nearest cent.) 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. 3. What if Job 316 had required one machine hour in Fabricating and four direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate the new cost of Job 316.
Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally established, the normal usage expected for each department was 20,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2. Required: 1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing. 2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.
The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 46,000 0% 20% 40% 40% Service 2 (S2) 36,000 25 0 30 45 Production 1 (P1) 260,000 Production 2 (P2) 310,000 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $260,000 to $280,000?
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
[The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 40,000 0 % 25 % 30 % 45 % Service 2 (S2) 31,000 20 0 20 60 Production 1 (P1) 210,000 Production 2 (P2) 260,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
Your Companey has two service departments – Personnel and Maintenance. The Maintenance Department's costs of $160,000 are allocated on the basis of standard hours used. The Personnel Department's costs of $40,000 are allocated based on the number of employees. The costs of the operating Departments A and B are $80,000 and $120,000, respectively. Data on standard service hours and number of employees are as follows: Standard Service Maintenance Dept. Personnel Dept. Production Depts. A B Hours used - 400 480 320 Number of Employees 20 - 80 240 What is the cost of the Maintenance Department allocated to Department B using the direct method? What is the cost of the…
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the amount of service department cost allocated to P1 and P2 using the direct method if the cost in P1 is changed from $270,000 to $290,000?
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the amount of service department cost allocated to P1 and P2 using the direct method?
Support Department Cost Allocation Arctic Tundra Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Estimated direct costs and percentages of services used by these departments are as follows: Used by Department Support Dept. S1 S2 P1 P2 S1 - 10% 40% 50% S2 20% - 50% 30% Direct costs $4,500 $8,000 $10,000 $15,000 Prepare a schedule allocating the support department costs to the producing departments using the direct allocation method. Also show the total costs for each producing department. Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method. The size of the direct costs of the department determines the order of allocation. Also show the total costs for each producing department.
Required information Skip to question [The following information applies to the questions displayed below.] The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 after allocation using the direct method?