Christmas Timber, Inc., produces Christmas trees. The trees areproduced through a cutting and pruning process. Machine maintenanceand janitorial labors are performed throughout the production processby nonproduction employees. Maintenance and janitorial costs areallocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting andpruning areas typically have about 20 and 60 trees, respectively, in themat one time. The company also estimates that the cutting processrequires about 9 times as many machine hours as the pruning process.The total costs of each department are as follows: Maintenance DepartmentJanitorial DepartmentCutting DepartmentPruning Department $ 7,8005,00054,50011,000 Using the direct method of support department cost allocation,determine the total cost of each production department after allocatingalI support costs to the production departments.
Christmas Timber, Inc., produces Christmas trees. The trees areproduced through a cutting and pruning process. Machine maintenanceand janitorial labors are performed throughout the production processby nonproduction employees. Maintenance and janitorial costs areallocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting andpruning areas typically have about 20 and 60 trees, respectively, in themat one time. The company also estimates that the cutting processrequires about 9 times as many machine hours as the pruning process.The total costs of each department are as follows: Maintenance DepartmentJanitorial DepartmentCutting DepartmentPruning Department $ 7,8005,00054,50011,000 Using the direct method of support department cost allocation,determine the total cost of each production department after allocatingalI support costs to the production departments.
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 4E: Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and...
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Christmas Timber, Inc., produces Christmas trees. The trees are
produced through a cutting and pruning process. Machine maintenance
and janitorial labors are performed throughout the production process
by nonproduction employees. Maintenance and janitorial costs are
allocated based on machine hours used and the number of trees in each
department, respectively. The company estimates that the cutting and
pruning areas typically have about 20 and 60 trees, respectively, in them
at one time. The company also estimates that the cutting process
requires about 9 times as many machine hours as the pruning process.
The total costs of each department are as follows:
| Maintenance Department Janitorial Department Cutting Department Pruning Department |
$ 7,800 5,000 54,500 11,000 |
Using the direct method of support department cost allocation,
determine the total cost of each production department after allocating
alI support costs to the production departments.
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