Buster customer service department follows up on customer complaints by telephone inquiry. Last quarter the department initiated 15,200 calls and incurred costs of $357,200. Of these calls, 4,230 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are: Multiple Choice

Buster customer service department follows up on customer complaints by telephone inquiry. Last quarter the department initiated 15,200 calls and incurred costs of $357,200. Of these calls, 4,230 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are: Multiple Choice

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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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
XYZ Company's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 6,000 calls and incurred costs of $203,000. If 2,940 of these calls were for the company's marketing division (the remainder were for the retail division), costs allocated to the retail division should amount to: Select one: O a. $117,740. O b. $99,470. O c. $203,000. O d. $85,260. O e. $103,530.
Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 15,700 calls and incurred costs of $329,700. If 3,150 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to which of the following: A. $329,700. B. $66,150. C. $21. D. $263,550. E. $0.
Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: Activity Cost Driver Activity Cost Cost Driver Volume Processing order Number of orders $ 70,000 5,000 orders Loading truck Number of items 105,000 75,000 items Delivering order Number of orders 85,000 5,000 orders Billing Number of invoices 68,000 4,000 invoices Total overhead $ 328,000 Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow: McLean Designs Neveux Appliances Order value (total) $ 72,000 $ 82,000 Number of orders 52 96 Total number of items 510 1,200 Number of invoices 12 90…
Rupert’s Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: Activity Cost Driver Activity Cost Cost Driver Volume Processing order Number of orders $ 42,000 3,000 orders Loading truck Number of items 171,000 95,000 items Delivering order Number of orders 51,000 3,000 orders Billing Number of invoices 34,000 2,000 invoices Total overhead $ 298,000 Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow: McLean Designs Neveux Appliances Order value (total) $ 76,000 $ 86,000 Number of orders 56 136 Total number of items 400 1,600 Number of invoices 10 130…
Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Clients Revenues Eastside 25,000 $360,000 8,100 Westside 6,250 $ 240,000 2,700 $ 99,000 $ 108,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center? Required A Required B Complete this question by entering your answers in the tabs below. Predetermined overhead rate Total 31,250 $ 600,000 10,800 $ 207,000 $360,000 Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. Note: Round your answer to 2…
Corazon Manufacturing Company has a purchasing department staffed by five purchasingagents. Each agent is paid $28,000 per year and is able to process 4,000 purchase orders. Lastyear, 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 availabilityb. unused capacity3. Calculate the dollar cost of:a. total activity availabilityb. unused capacity4. 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 pur-chase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
ervice Department Charges The centralized computer technology department of Hardy Company has expenses of $372,600. The department has provided a total of 13,800 hours of service for the period. The Retail Division has used 6,762 hours of computer technology service during the period, and the Commercial Division has used 7,038 hours of computer technology service. How much should each division be charged for computer technology department services? Do not round interim calculations. Retail Division $fill in the blank 1 Commercial Division $fill in the blank 2
The centralized travel department of Bour Company has costs of $40,560. The department has serviced a total of 390 travel reservations for the period. The South Division has made 226 reservations during the period, and the North Division has made 164 reservations. How much should the South Division be allocated for travel services? Group of answer choices $40,560 $23,504 $17,056 $3,900
Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow. Cost Driver VolumeActivityCost DriverCostDriver VolumeProcessing orderNumber of orders$104,0008,000ordersLoading truckNumber of items312,000195,000itemsDelivering merchandiseNumber of orders128,0008,000ordersProcessing invoiceNumber of invoices112,0007,000invoicesTotal overhead$656,000 Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City DinerLe Chien ChaudOrder value$88,000$98,000Number of orders68300Number of items5501,800Number of invoices12200 Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of…
Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. 三 Cost Driver Volume Activity Processing order Loading truck Delivering merchandise Processing invoice Cost $ 60,000 266,000 72,000 Driver Volume 4,000 orders 140,000 items 4,000 orders 3,000 invoices Cost Driver Number of orders Number of items Number of orders Number of invoices 54,000 Total overhead $452,000 Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner $77,000 Le Chien Chaud Order value $87,000 Number of orders 57 190 Number of items Number of invoices 450 2,300 11 230 Required: a. What would the delivery charge for each customer be under…
Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow. Cost Driver Volume Activity Cost Driver Cost Driver Volume Processing order Number of orders $ 65,000 5,000 orders Loading truck Number of items 342,000 100,000 items Delivering merchandise Number of orders 80,000 5,000…