Mailings Review View Help Ao AaBbCcD AaBbCcDc AaBbC AaBbC A - ==E-|2- T Normal TNo Spac.. Heading 1 Heading Paragraph Styles 1. 2. 6 . %23 Johnson Company produced chemical producds. Janitorial and maintenance support department costs are allocated to the mixing and blending production departments based on square footage (janitorial) and machine hours (maintenance), respectively. Relevant department data is as follows: Janitorial Maintenance Mixing Blending Department Cost $18,000 $12,000 $52,000 $63,000 Square footage 1,000 3,000 Machine Hours 500 1,000 Using the direct method of support department cost allocation, determine the total cost of the Mixing and Blending departments after allocating all support costs to the production departments. Joint Cost Allocation Anderson Company makes three types of paint products: base, primer and paint. All products go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer is two times longer than for base, and the mixing process for paint is three times longer than for base. 1. Allocate the joint cost of production of $10,000 to each product using the veighted average method. 2. Assuming the market price at the split of point for base is 53 per galon, primer is 54 per gallon and paint is 58 per gallon, use the market value at split-off to allocate thne $10,000 of joint production costs. 3. Analyze the differences in the methoos used in #1 and #2 above. Wnat are the reasons for the difference? When would each method be most appropriate to use?
Mailings Review View Help Ao AaBbCcD AaBbCcDc AaBbC AaBbC A - ==E-|2- T Normal TNo Spac.. Heading 1 Heading Paragraph Styles 1. 2. 6 . %23 Johnson Company produced chemical producds. Janitorial and maintenance support department costs are allocated to the mixing and blending production departments based on square footage (janitorial) and machine hours (maintenance), respectively. Relevant department data is as follows: Janitorial Maintenance Mixing Blending Department Cost $18,000 $12,000 $52,000 $63,000 Square footage 1,000 3,000 Machine Hours 500 1,000 Using the direct method of support department cost allocation, determine the total cost of the Mixing and Blending departments after allocating all support costs to the production departments. Joint Cost Allocation Anderson Company makes three types of paint products: base, primer and paint. All products go through a joint mixing process which produces 8,000 gallons of base, 6,000 gallons of primer and 4,000 gallons of paint at a joint cost of $10,000. In addition, the mixing process for primer is two times longer than for base, and the mixing process for paint is three times longer than for base. 1. Allocate the joint cost of production of $10,000 to each product using the veighted average method. 2. Assuming the market price at the split of point for base is 53 per galon, primer is 54 per gallon and paint is 58 per gallon, use the market value at split-off to allocate thne $10,000 of joint production costs. 3. Analyze the differences in the methoos used in #1 and #2 above. Wnat are the reasons for the difference? When would each method be most appropriate to use?
Accounting
27th Edition
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Chapter20: Process Cost Systems
Section: Chapter Questions
Problem 20.1APR: Entries for process cost system Pori Ormond Carpel Company manufactures carpets. Fiber is placed in...
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