Guna publishing company has three service departments & two operating departments. Selected data from a recent period on five departments as follows: Cost type Service Departments Operating departments Total A B C 1 2 Overhead costs $140,000 $105,000 $48,000 $275,000 $430,000 $998,000 Number of employees 60 35 140 315 210 760 Space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time - - - 30,000 60,000 90,000 The company allocated service department costs by the step method in the following order. A (number of employees). B (Space occupied), & C (hours of press time). The company makes no distinction between variable & fixed service department costs. Required: 1) Assuming that the company used the direct method, how much overhead cost would be allocated to each operating departments? 2) Using the step method, allocate the service department costs to the operating departments

Guna publishing company has three service departments & two operating departments. Selected data from a recent period on five departments as follows: Cost type Service Departments Operating departments Total A B C 1 2 Overhead costs $140,000 $105,000 $48,000 $275,000 $430,000 $998,000 Number of employees 60 35 140 315 210 760 Space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time - - - 30,000 60,000 90,000 The company allocated service department costs by the step method in the following order. A (number of employees). B (Space occupied), & C (hours of press time). The company makes no distinction between variable & fixed service department costs. Required: 1) Assuming that the company used the direct method, how much overhead cost would be allocated to each operating departments? 2) Using the step method, allocate the service department costs to the operating 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

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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Guna publishing company has three service departments & two operating departments. Selected data from a recent period on the five departments follow. Service Departments Operating Departments Total A B C 1 2 Overhead costs 140,000 105,000 48,000 275,000 430,000 998,000 Number of employees 60 35 140 315 210 760 Space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time - - - 30,000 60,000 90,000 The company allocated service department costs by the step method in the following order. A(number of employees). (B/space occupied), & C( hours of press time ) . The company makes no distinction between variable & fixed service department costs. Required Assuming that the company used the direct method, how much overhead cost would be allocated to each operating department? using the step method, allocate the service department costs to the…
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Service Department Operating Department A B C 1 2 Total Overhead costs £ 100,000 £ 115,000 £ 73,000 £ 266,500 £ 289,000 £ 843,500 Number of employees 57 33 132 297 198 717 Square feet of space occupied 12,600 7,100 21,000 42,000 105,000 187,700 Hours of press time 34,000 68,000 102,000 The company allocates service department costs by the step method in the following order: A (number of employees), B (space occupied), and C (hours of press time). The company makes no distinction between variable and fixed service department costs. Required: Using the step method, allocate the service department costs to the operating departments. (Do not round intermediate calculations. Amounts to be deducted…
Woh Che Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Cost Allocation Base Supervision $ 82,500 Number of employees Utilities 50,000 Square feet occupied Insurance 22,500 Value of assets in use Total $ 155,000 Departmental data for the company’s recent reporting period follow. Department Employees Square Feet Asset Values Materials 27 25,000 $ 6,000 Personnel 9 5,000 1,200 Manufacturing 63 55,000 37,800 Packaging 51 15,000 15,000 Total 150 100,000 $ 60,000 1. Use this information to allocate each of the three indirect expenses across the four departments.2. Prepare a summary table that reports the indirect expenses assigned to each of the…
Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR West East IT -- 0% 20% 40% 40% Accounting 0% -- 0% 40% 60% HR 10% 10% -- 60% 20% The direct costs of the service departments in the previous period were $91,000 for IT, $116,000 for Accounting, and $155,000 for HR. Required: Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Note: Amounts to be deducted should be indicated by a minus sign. IT Accounting HR West East Service department costs $ 0 HR allocation IT allocation Accounting allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0 Need help please
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…
. Lead LLC has three production departments and four service departments. The expenses for these departments are as follows: Production Departments Amount (RO) B121 5,000,000 C121 3,000,000 D121 2,000,000 Total Amount 10,000,000 Service Departments Amount (RO) Stores 200,000 Time keeping & accounts 100,000 Power 300,000 Canteen 400,000 Total Amount 1,000,000 The following information is also available in respect of the production departments: Particulars Department A Department B Department C Horse power of machine 200 100 300 Number of workers 10 8 7 Value of stores requisition (RO) 100,000 75,000 25,000 Apportion the cost of service department over the production departments.
The Michigan Company provides the following selected data about its three service and two operating departments: Production Dept1 Production Dept2 Service Dept 1 Service Dept 2 Overhead costs 200,000 267,000 180,000 105,000 Number of Employees 315 210 60 35 Square feet of space occupied 40,000 100,000 5,000 10,000 Hours of press time 15,000 30,000 0 0 Direct labor hours 10,000 20,000 0 0 Machine hours 50,000 60,000 The order and bases for allocating service department costs is given below: SD1; allocation base is number of employees SD2; Allocation base is space occupied Assume that PD1 and PD2 both use direct labor hours for computing OH rate. Using the Direct method of allocation, how much OH rate must be assigned to PD1? Using the Step Method of allocation, how much OH rate must be assigned to PD2? Using the Step Method, how much is the cost of SD1 to be allocated to PD2? Using the…
8. Lisa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Personnel Dept. Production Dept. A Production Dept. B Standard service hours used 200 200 240 160 Number of employees 10 20 40 120 How much of the cost of the Maintenance Department is allocated to Department B using the direct method? Select one: a. $60,000 b. $32,000 c. $12,800 d. $24,000 e. $16,000
Westmore Company has two service departments and two operating departments. Budgeted costs and other data relating to these departments are presented below:Building Operating Department& Grounds Personnel A BDepartmental costs ..... $54,000 $200,000 $650,000 $800,000Square feet occupied ... 1,000 3,000 12,000 15,000Number of employees .... 10 5 45 55Direct laborhours ..... 76,000 92,000The costs of Building & Grounds are allocated first on the basis of square feet of space occupied. Personnel costs are allocated on the basis of numberof employees. The departmental costs for the operating departments are overhead costs. Predetermined overhead rates in the operating departments are computed on the basis of direct laborhours.Assume that the company uses the direct method of allocating service department costs. The predetermined overhead rate that would be used in Department B would be closest to:a. $11.50/DLH.b. $12.00/DLH.c. $10.00/DLH.d. $10.22/DLH.
Use this information for ABC Corporation to answer the question that follow. ABC Corporation has three service departments with the following costs and cost drivers: Service Department Cost Cost Driver Graphics Production $200,000 Number of copies made Accounting 500,000 Number of invoices processed Personnel 400,000 Number of employees ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost, and activity information is as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses $50,000 $70,000 $100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 What is the service department allocation rate for the Personnel Department? a.$1,000 per employee b.$2,758 per employee c.$3,077 per employee d.$3,200 per employee
The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. How much should each division be allocated for computer technology department services? Do not round interim calculations. Retail Division $fill in the blank 1 Commercial Division $fill in the blank 2
A Company has two support departments (Administration and Janitorial) and three producing departments (Fabricating, Assembly, and Finishing). Costs and activities are as follows: Administration Janitorial Fabricating Assembly Finishing Direct Costs ................... $50,000 $30,000 $40,000 $50,000 $25,000 Number of employees . 10 30 40 20 Square Feet 2,000 10,000 28,000 15,000 Direct labor hours 5,000 6,000 2,000 Administrative services are allocated based on…

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Cost type	Service Departments	Operating departments	Total
	A	B	C	1	2
Overhead costs	$140,000	$105,000	$48,000	$275,000	$430,000	$998,000
Number of employees	60	35	140	315	210	760
Space occupied	15,000	10,000	20,000	40,000	100,000	185,000
Hours of press time	-	-	-	30,000	60,000	90,000