Problem 22-2A (Algo) Allocation of indirect expenses to departments LO P2 [The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total $ 45,000 25,000 10,000 $80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of Indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Value of Insured Assets $ 45,000 55,000 $ 100,000 Department Housevares Sporting Total Square Feet 2,000 2,000 4,000 Problem 22-2A (Algo) Part 1 Sales $ 230,000 270,000 $ 500,000 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods.

Problem 22-2A (Algo) Allocation of indirect expenses to departments LO P2 [The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total $ 45,000 25,000 10,000 $80,000 The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of Indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Value of Insured Assets $ 45,000 55,000 $ 100,000 Department Housevares Sporting Total Square Feet 2,000 2,000 4,000 Problem 22-2A (Algo) Part 1 Sales $ 230,000 270,000 $ 500,000 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter23: Performance Evaluation For Decentralized Operations

Section: Chapter Questions

Problem 23.9EX

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Profit center responsibility reporting XSport Sporting Goods Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: SalesWinter Sports Division.......................................... 10,500,000 SalesSummer Sports Division........................................ 13,600,000 Cost of Goods SoldWinter Sports Division ............................ 6,300,000 Cost of Goods SoldSummer Sports Division........................... 7,888,000 Sales ExpenseWinter Sports Division ................................. 1,680,000 Sales ExpenseSummer Sports Division ............................... 1,904,000 Administrative ExpenseWinter Sports Division........................ 1,050,000 Administrative ExpenseSummer Sports Division....................... 1,210,400 Advertising Expense .................................................. 482,000 Transportation Expense ............................................... 240,000 Accounts Receivable Collection Expense................................ 120,500 Warehouse Expense................................................... 1,200,000 The bases to be used in allocating expenses, together with other essential information, are as follows: A. Advertising expenseincurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, 216,900; Summer Sports Division, 265,100. B. Transportation expensecharged back to divisions at a charge rate of 8.00 per bill of lading: Winter Sports Division, 14,400 bills of lading; Summer Sports Division, 15,600 bills of lading. C. Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of 5.00 per invoice: Winter Sports Division. 9,640 sales invoices; Summer Sports Division, 14,460 sales invoices. D. Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division. 94,000 square feet; Summer Sports Division, 106,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Provide supporting calculations for service department charges.
Problem 22-4A Departmental contribution to income LO P3 Vortex Company operates a retail store with two departments. Information about those departments follows. Department A Department B Sales $ 800,000 $ 450,000 Cost of goods sold 497,000 291,000 Direct expenses: Salaries 125,000 88,000 Insurance 20,000 10,000 Utilities 24,000 14,000 Depreciation 21,000 12,000 Maintenance 7,000 5,000 The company also incurred the following indirect costs. Salaries $36,000 Insurance 6,000 Depreciation 15,000 Office expenses 50,000 Indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows. Department Square footage Number of employees A 28,000 75 B 12,000 50 Required:1.…
Exercise 22-3 Service department expenses allocated to operating departments LO P2 Advertising department expenses of $24,000 and purchasing department expenses of $34,000 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Sales Purchase Orders Books $ 495,000 516 Magazines 198,000 360 Newspapers 207,000 324 Total $ 900,000 1,200 Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.
Problem 7-5A a, b1-b3, c (Part Level Submission) (Video) Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $210,600 and the following divisional results. Division I II III IV Sales $245,000 $197,000 $504,000 $450,000 Cost of goods sold 200,000 192,000 301,000 249,000 Selling and administrative expenses 72,400 63,000 58,000 50,000 Income (loss) from operations $ (27,400) $ (58,000) $145,000 $151,000 Analysis reveals the following percentages of variable costs in each division. I II III IV Cost of goods sold 73 % 91 % 82 % 75 % Selling and administrative expenses 39 59 50 61 Discontinuance of any division would save 50% of the fixed costs and expenses for that division.Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or…
Exercise 22-8 Departmental income statement and contribution to overhead LO P3 Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 605,000 Cost of goods sold 425,000 Salaries 112,000 ($15,000 is indirect) Utilities 14,000 ($3,000 is indirect) Depreciation 42,000 ($10,000 is indirect) Office expenses 20,000 (all indirect) 1. Prepare a departmental income statement for 2019.2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?
Additional information: 1. Inventory on 31 March 2021: Raw materials RM 19,400 Work in progress RM 16,400 Finished goods RM 31,400 2. Utilities and insurance expense are to be apportioned between factory and office in the ratio 2:1. 3. Only 40% of the rent expense and 50% of the general expense apply to factory operations, the remaining amounts should be charged to administrative activities. 4. Accrued payments: Factory direct wages RM 2,500 Utilities RM 1,800 5. Depreciation for the year is to be charged as follows:. Plant and machinery 10% on cost Office equipment 5% on reducing balance method Required : a) Prepare statement of cost of goods manufactured for the year ended 31 March 2021. b) Prepare statement of profit or loss for the year ended 31 March 2021. c) Prepare statement of financial position as at 31 March 2021.
21. Joint products A, B and C are produced by JNT Corp. For the month just ended, these data are available: a. • P2.033 b. • P1.985 c. • P2.045 d. • P2.106
TB MC Qu. 11-53 (Algo) Cordner Corporation has two production departments... Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 120,000 0.70 0.10 0.20 S2 $ 133,000 0.20 0.30 0.50 P1 $ 183,000 P2 $ 176,000 Under the step method of cost allocation, the amount of S2 costs allocated to S1 would be: Multiple Choice $55,200. $0. $26,600. $53,200.
ABC Factory Balance Sheet Year 1 % Year 2 % Assets Cash 43,500 8.84 55,000 14.25 Inventory 22,000 4.47 23,500 6.09 Equipment and fixures 380,000 77.24 255,000 66.08 Supplies 3,800 0.77 4,100 1.06 Prepaid expenses 9,200 1.87 12,500 3.24 Store design/Buildout 27,000 5.49 27,000 7 Loan Fee 4,000 0.81 5,500 1.42 Advertising and Marketing 2,500 0.51 3,300 0.86 Total assets 492,000 100 385,900 100 Bank Loan 150,000 30.49 170,000 44.05 Other liability (Balancing figure) 292,000 59.35 170,900 44.29 Owner contribution 50,000 10.16 45,000 11.66 Total equity and liability 492,000 100 385,900 100 ABC Factory Income Statement Particular Year 1 Year 2 Revenue 50,000 52,500 Operating Expenses Rent 4200 4,410 Insurance 1000 1,050 License and Registration 2000 2,100 Wages 20000…
QUESTION 22 ABCO Mortgage Company has the following two service and production departments related to its lending and servicing business: Service Departments Production Lending Departments HR Accounting Commercial Consumer Department cost $110,000 $225,500 $2,800,000 $1,600,000 Number of employees 2 3 9 11 Number of transactions 750 2,250 3,650 6,350 HR costs are allocated on the basis of number of employees. Accounting cost are allocated based on the number of transactions. Required: Using the Direct Method, allocate the amounts of overhead from the HR service department to Consumer production department. $60,500 $66000 $62,013 $60,000
questoin 9 chapter 4 Assume a company provided the following information: Service Departments Operating Departments Cafeteria Janitorial Lab Tech Departmental costs $ 180,000 $ 140,000 $ 232,000 $ 950,000 Number of employees 10 20 40 60 Square feet of space occupied 3,000 2,000 11,000 9,000 If the company (1) uses the step-down method (beginning with the Cafeteria) to allocate service department costs to operating departments, (2) allocates Cafeteria costs based on the number of employees, and (3) allocates Janitorial costs based on square feet of space of occupied, then the cost allocated from the Cafeteria Department to the Lab Department is closest to: Multiple Choice $60,000. $54,871. $73,333. $113,333.
Item5 eBookPrintReferencesCheck my workCheck My Work button is now disabled1Item 5 Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales $ 36,480,000 Net operating income $ 2,808,960 Average operating assets $ 8,000,000 The company's minimum required rate of return 16% The division's residual income is closest to: Multiple Choice $2,808,960 $4,088,960 $(3,027,840) $1,528,960