Extreme Manufacturing Company provides the following ABC costing information:ActivitiesTotal CostsActivity - cost driversAccount inquiry$390, 00013, 000 hoursAccount billing$ 275,0005,000,000 linesAccount verification accounts$130, 50060, 000 accountsCorrespondence letters $22, 0004, 000 lettersTotal costs$817,500 The above activities are used by Departments A and B (among other departments) as follows: Department ADepartment BAccount inquiry hours2, 500 hours4, 000 hoursAccount billing lines800, 000 lines650,000 linesAccount verification accounts9,000 accounts7,000 accountsCorrespondence letters2, 000 letters2, 400 letters How much of correspondence costs will be assigned to Department A? Question 12 Select one:A. $49, 500B.$11,242C.$11,000D. $22,000

Extreme Manufacturing Company provides the following ABC costing information:ActivitiesTotal CostsActivity - cost driversAccount inquiry$390, 00013, 000 hoursAccount billing$ 275,0005,000,000 linesAccount verification accounts$130, 50060, 000 accountsCorrespondence letters $22, 0004, 000 lettersTotal costs$817,500 The above activities are used by Departments A and B (among other departments) as follows: Department ADepartment BAccount inquiry hours2, 500 hours4, 000 hoursAccount billing lines800, 000 lines650,000 linesAccount verification accounts9,000 accounts7,000 accountsCorrespondence letters2, 000 letters2, 400 letters How much of correspondence costs will be assigned to Department A? Question 12 Select one:A. $49, 500B.$11,242C.$11,000D. $22,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...

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A manufacturing company has two service and two production departments. Human Resources and Machine Repair are the service departments. The production departments are Grinding and Polishing. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The human resources department services all departments of the company, and its costs are allocated using the numbers of employees within each department, while machine repair costs are allocable to Grinding and Polishing on the basis of machine 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.
Bell, Biv, and Devoe Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,200 2,200 Account billing (lines) $55,000 34,000 Account verification (accounts) $39,250 25,500 Correspondence (letters) $71,000 9,000 The company uses activity-based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 400 800 Account billing (lines) 10,000 4,000 Account verification (accounts) 6,000 7,000 Correspondence (letters) 1,000 2,000 What is the cost per driver unit for the account inquiry activity? (Round all answers to two decimal places.) $1.62 $9.47 $7.89 $38.73
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining. Order Filing, and Other-based on resource consumption, Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Activity: Product W1 Product Me Total Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Ms) and Order Filing costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Product W1 Product Me Total Activity Cost Pools MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text 5,530 17,000 22,530 Orders (Order Filling)…
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity−cost drivers Account inquiry $280,000 14,000 hours Account billing $350,000 7,000,000 lines Account verification accounts $93,750 50,000 accounts Correspondence letters $29,000 4,000 letters Total costs $752,750 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,100 hours 3,600 hours Account billing lines 500,000 lines 350,000 lines Account verification accounts 7,000 accounts 5,000 accounts Correspondence letters 1,200 letters 1,600 letters How much of the total costs will be assigned to Department A? A. $85,075 B. $120,000 C. $118,825 D. $88,825
Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,700 2600 Account billing (lines) $55,000 35,000 Account verification (accounts) $40,250 27,500 Correspondence (letters) $80,000 12,000 Potter & Weasley uses activity based costing.The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 200 1000 Account billing (lines) 10,000 4,000 Account verification (accounts) 6,000 7,000 Correspondence (letters) 1,000 2,000 How much of the account inquiry cost will be assigned to Department Q? Question 15 options: $1318 $32,962 $6592 $13,000
Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Materials Personnel Manufacturing Packaging Employees Square Feet Asset Values $ 7,900 4,740 45,820 20,540 $ 79,000 38 19 76 57 64,750 9,250 92,500 18,500 Total 190 185,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Cost Allocation Base $ 84,400 Number of employees 69,000 Square feet occupied 32,000 Asset values $ 185,400 Insurance Total Allocate each of the three indirect expenses to the four departments. Supervision Cost to be Allocated Allocation Base Percent of Allocation Base Allocated Cost expenses Department Numerator Denominator % of Total Materials Personnel Manufacturing Packaging Totals Cost to be Allocated Utilities Allocation Base Percent of Allocation Base Allocated Cost Department Numerator Denominator % of Total…
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $320,000 16,000 hours Account billing $200,000 4,000,000 lines Account verification accounts $173,250 70,000 accounts Correspondence letters $24,000 4,000 letters Total costs $717,250 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,700 hours 4,200 hours Account billing lines 950,000 lines 750,000 lines Account verification accounts 8,500 accounts 6,500 accounts Correspondence letters 1,400 letters 1,800 letters How much of the account billing cost will be assigned to Department A? How much of the account verification accounts cost will be assigned to Department B?
Extreme Manufacturing Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs S This question: 25 point(s) possible Total Costs $140,000 $105,000 $173,250 $39,000 $457,250 Activity-cost drivers 14,000 hours 7,000,000 lines 70,000 accounts 6,000 letters The above activities are used by Departments A and B as follows: Department A 5455L OA. $104,125 OB. $89,125 OC. $141,450 OD. $84,175 Department B
Merlin Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $25,000 4,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters Required: a. How much of the correspondence costs will be assigned to Department B? b. How much of the total costs will be assigned to Department A?
Gandolf Manufacturing provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $390,000 13,000 hours Account billing $275,000 5,000,000 lines Account verification accounts $130,500 60,000 accounts Correspondence letters $22,000 4,000 letters Total costs $817,500 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,500 hours 4,000 hours Account billing lines 800,000 lines 650,000 lines Account verification accounts 9,000 accounts 7,000 accounts Correspondence letters 2,000 letters 2,400 letters Required: How much of correspondence…
Fran Ferry company had the following activities, pooled costs, and physical flow of driver units. The company uses activity-based costing. Activities Pooled Cost Physical flow of Driver Units Account Inquiry (hours) $200,000 5000 (hours) Account billing (Lines) $140,000 2,000,000 lines Account Verification (accounts) $5,000 20,000 accounts Correspondence (letters) $25,000 2,000 letters The above activities are used by departments A and B as follows: Department A Department B Account Inquiry (hours) 1,000 2,000 Account Billing (Lines) 200,000 100,000 Account Verification (accounts) 5,000 4,000 Correspondence…
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs $390,000 $150,000 $103,750 $17,250 $661,000 Account inquiry Account billing Account verification accounts Correspondence letters Total costs The above activities are used by Departments A and B as follows: Department A 2,900 hours 900,000 lines Account inquiry hours Account billing lines Account verification accounts Correspondence letters How much of the account inquiry cost will be assigned to Department A? OA. $132,000 O B. $390,000 O C. $195,000 O D. $87,000 10,000 accounts 2,000 letters Activity - cost drivers 13,000 hours 6,000,000 lines 50,000 accounts 3,000 letters Department B 4,400 hours 750,000 lines 8,000 accounts 2,400 letters