(b) Question 1 Tika Bhd has three production departments, Dept A, B, C, and service department canteen for workers. Each job must go through all the three departments. Overheads for forth coming moth is as follows: (a) Allocated Overhead Maintenance cost: Common cost Rental Depreciation Supervision costs Dept A Dept B Dept Canteen Required: Dept A Dept B Dept C Canteen Information related to all departments given as follows: Machine Machinery Floor Area hours value 20,000 RM12,000 15,000 RM10,000 5,000 RM 3,000 nil nil (m²) 5,000 RM 1,000 2,000 2,500 500 6,000 3,000 1,000 Depreciation Supervision costs Canteen cost (reallocation) 12,000 2,400 4,000 No. of Operators 30 50 20 nil Prepare an overhead analysis sheet using the apportionment method below to assign the common cost: Rental Floor area Machine value No of operators No of operators Note: All calculation must be to the nearest RM (No decimal point) Calculate departmental overhead absorption rates based on machine hours. Note: All calculation must be to the nearest 2 decimal point

(b) Question 1 Tika Bhd has three production departments, Dept A, B, C, and service department canteen for workers. Each job must go through all the three departments. Overheads for forth coming moth is as follows: (a) Allocated Overhead Maintenance cost: Common cost Rental Depreciation Supervision costs Dept A Dept B Dept Canteen Required: Dept A Dept B Dept C Canteen Information related to all departments given as follows: Machine Machinery Floor Area hours value 20,000 RM12,000 15,000 RM10,000 5,000 RM 3,000 nil nil (m²) 5,000 RM 1,000 2,000 2,500 500 6,000 3,000 1,000 Depreciation Supervision costs Canteen cost (reallocation) 12,000 2,400 4,000 No. of Operators 30 50 20 nil Prepare an overhead analysis sheet using the apportionment method below to assign the common cost: Rental Floor area Machine value No of operators No of operators Note: All calculation must be to the nearest RM (No decimal point) Calculate departmental overhead absorption rates based on machine hours. Note: All calculation must be to the nearest 2 decimal point

Name: (b)Question 1Tika Bhd has three production departments, Dept A, B, C,
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Description: (b)Question 1Tika Bhd has three production departments, Dept A, B, C, and service departmentcanteen for workers. Each job must go through all the three departments. Overheadsfor forth coming moth is as follows:(a)Allocated OverheadMaintenance cost:C

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 21E: Refer to the data in Exercise 7.20. The company has decided to use the sequential method of...

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Journalizing the distribution of service department costs to production departments Required: Using your solution to P4-7, prepare journal entries for the following: The distribution of the total factory overhead of $79,400 to the individual production and service departments where it originated. The distribution of the Building Maintenance overhead to the appropriate other departments. The distribution of the Factory Office overhead to the appropriate other departments.
Refer to the data in Exercise 7.20. The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Allocate the overhead costs to the producing departments using the sequential method. (Take allocation ratios out to four significant digits. Round allocated costs to the nearest dollar.) 2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)
Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as follows (all other data remain the same): The per unit overhead cost using the 14 activity-based drivers is 1,108 and 779 for Cylinder A and Cylinder B, respectively. Required: 1. Determine the percentage of total costs represented by the three most expensive activities. 2. Allocate the costs of all other activities to the three activities identified in Requirement 1. Allocate the other activity costs to the three activities in proportion to their individual activity costs. Now assign these total costs to the products using the drivers of the three chosen activities. 3. Using the costs assigned in Requirement 2, calculate the percentage error using the ABC costs as a benchmark. Comment on the value and advantages of this ABC simplification.
Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
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?
Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.) 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)
(Appendix 4B) Sequential Method of Support Department Cost Allocation Refer to Exercise 4-51 for data. Now assume that Stevenson uses the sequential method to allocate support department costs to the operating divisions. General Factory is allocated first in the sequential method for the company. Required: 1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places.) 2. Allocate the support service costs to the operating divisions. (Note: Round all amounts to the nearest dollar.) 3. Assume divisional overhead rates are based on direct labor hours. Calculate the overhead rate for the Battery Division and for the Small Motors Division. (Note: Round overhead rates to the nearest cent.)
A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.
C15Q5 Need help Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor–Hours Machining Assembly Job 88 23 2 Job 89 5 22 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements…
1. What is the total manufacturing overhead for P1 (Producing Department 1), after allocating service costs to producing departments. 2.Using data for Vicente, compute the total manufacturing overhead for P1, allocating service department costs stepwise, beginning with department S2. After a department expenses have been allocated, no expenses are assigned back to it. 3. Based on Vicente data: Determine the total manufacturing overhead (including service department costs) for P2 using the reciprocal method.
1. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much is the total overhead amount of Service Department E to be allocated? 2. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much of the total overhead amount of Service Department F is to be allocated to Producing Department C ? 3. Using the simultaneous method to allocate the service departments' costs to the producing departments, how much of the total overhead amount of Service Department F is to be allocated to Producing Department D ?