Stranahan Building at UT has the following for each department: Department Accounting Marketing Management Finance Total Square Footage 3,000 4,000 6,000 3,000 16,00 W Stranahan has $400,000 of overhead costs. What amount should be allocated to the Marketing Department? $60,000 $120,000 $80,000 O $100,000
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- Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally established, the normal usage expected for each department was 20,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2. Required: 1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing. 2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.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?
- Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.) 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)A firm has 100,000 in direct materials costs, 50,000 in direct labor costs, and 80,000 in overhead. Which of the following is true? a. Prime costs are 150,000; conversion costs are 180,000. b. Prime costs are 130,000; conversion costs are 150,000. c. Prime costs are 150,000; conversion costs are 130,000. d. Prime costs are 180,000; conversion costs are 150,000.High Traffic Products Corporation has two departments, Small and Large. Central costs could be allocated to the two departments in various ways. Small Department Large Department Square footage 6,700 17,750 Number of employees 1,000 410 Sales $370,000 $1,800,000 If total advertising expense of $629,300 is allocated on the basis of sales, the amount allocated to the Large Department would be ________. A) $107,300 B) $558,000 C) $522,000 D) $314,650
- Orpheus Ltd has a Human Resource Department, an Administration Department and three Sales Departments. The Human Resource Department cost is allocated based on the number of employees and the Administration Department cost is allocated based on direct labour hours. The support departments both serve each other and the three Sales Departments. The following information is available: HR Admin Sales #1 Sales #2 Sales #3 Budgeted cost 30,000 45,000 Number of employees 10 5 15 45 30 Direct labour hours 1,000 4,000 20,000 30,000 50,000 Use the step-down method to calculate the amount of Administration Department cost allocated to Sales #1.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.8. Adidas Inc. is exploring ways to allocate the cost of service departments such as Quality control and Maintenanceto the production departments such as Machining and assembly. The controller of the company has provided thefollowing information:QualityControl Maintenance Machining Assembly Total Budgetedoverhead costsbefore allocation P350,000 P200,000 P400,000 P300,000 P1,250,000 Budgetedmachine hours - - 50,000 hrs - 50,000 hrsBudgeted directlabor hours - - - 25,000 hrs 25,000 hrsBudgeted hoursof service ofquality control - 7,000 hrs 21,000 hrs 7,000 hrs 35,000 hrs Budgeted hoursof servicemaintenance 10,000 hrs - 18,000 hrs 12,000 hrs 40,000 hrs 1. Under direct method of allocating service department costs, what are the total service costs allocated tothe machining and assembly departments, respectively?a. 382,500 and 167,500b. 300,000 and 130,000c. 412,500 and 137,500d. 330,000 and 220,0002. Under the step-down method of allocating service department costs from quality control to…
- Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 1,700 feet General administration 3,700 feet Producing Department A 8,700 feet Producing Department B 8,700 feet 22,800 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $45,000, the amount of cost allocated to General Administration under the direct method would be: Multiple Choice $7,400. $9,432. $7,303. $0.Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 2,700 feet General administration 4,700 feet Producing Department A 9,700 feet Producing Department B 9,700 feet 26,800 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $55,000, the amount of cost allocated to General Administration under the direct method would be:Main Company has two service departments, Factory administration and Maintenance, and two operating departments, Cutting and Assembly. Selected budgeted information relating to these departments for the next year of operation is given below: Service department Operating Department Factory admin Maintenance Cutting Assembly Departmental costs R113 400 R80 000 R700 000 R600 000 Number of employees 3 5 40 60 Total labour hours 4 000 6 000 80 000 120 000 The company allocates service department costs by the step method. Factory administration costs are allocated first on the basis of number of employees and then Maintenance costs are allocated on the basis of total labour hours. The total Maintenance costs allocated to the Cutting Department is closest to: A. R31 068 B. R34 160 C. R32 000 D. R51 240