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- Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?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.Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
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- The Science Institute has three departments: Biology, Chemistry, and Physics. The institute's controller wants to estimate the cost of operating each department. He has identified several indirect costs that must be allocated to each department including $52,000 of indirect salaries, $9,000 of office supplies, and $41,000 of office rent. There are 500 students in the biology department, 200 in chemistry and 300 in physics. The director of the Institute wants to know how much of the indirect cost to allocate to each department. Based on this informationMiddler Corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services (CCS) service department costs to profit centers. The following table lists service categories and cost drivers used by the CCS department. The table also includes cost and cost drivers for each service for October. CCS ServiceCategory Cost Driver Budgeted Cost Budgeted CostDriver Quantity Help desk Number of calls $110,250 2,500 Network center Number of devices monitored 619,500 8,850 Electronic mail Number of user accounts 47,600 5,950 Handheld technology support Number of handheld devices issued 106,240 8,300 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has 2,000 employees, of whom 40% are office employees. Almost all office employees (70%) have a computer on the network. 90 percent of the employees with a computer…The centralized computer technology department of Lee Company has expenses of$264,000. The department has provided a total of 2,500 hours of service for the period. TheRetail Division has used 1,125 hours of computer technology service during the period, andthe Commercial Division has used 1,375 hours of computer technology service. How mucheach division should be charged for computer technology department services?
- Miracle Consulting Corporation has its headquarters in Chicago and operates from three branch offices in Portland, Dallas, and Miami. Two of the company's activity cost pools are General Service and Research Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: Activity Cost Pool Activity Measure Estimated Cost General service % of time devoted to branch $ 700,000 Research service Computer time $ 140,000 Estimated branch data for next year is as follows: % of time Computer time Portland 30 % 200,000 minutes Dallas 60 % 150,000 minutes Miami 10 % 50,000 minutes How much of the headquarters cost allocation should the Dallas office expect to receive next year? Multiple Choice $409,500. $472,500. $504,000. $280,000.Gipps Business College (GBC) has two degree programs, undergraduate (UG) and graduate (GRAD) and three service departments, information technology (IT), Event Planning (EP), and Career Services (CS). The CFO of GBC is conducting a profitability analysis of the two programs and wants to include the appropriate costs of the service departments in the costs of the two degree programs. As a part of the analysis, the CFO has collected the following usage patterns of the ser vice departments over the last two years. Using Departments Suppying Department IT EP CS UG GRAD IT 0 10% 20% 40% 30% EP 0 0 25% 25% 50% CS 0 0 0 60% 40% Direct Costs $ 70,000.00 $ 90,000.00 $ 100,000.00 To be determined Required:- a.) The CFO is unsure what the best way to allocate the cost is and has asked you for the allocations to the UG and GRAD programs using: The direct method; The step method starting with IT, followed by EP,…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.