![EBK HORNGREN'S COST ACCOUNTING](https://www.bartleby.com/isbn_cover_images/9780134475998/9780134475998_largeCoverImage.gif)
EBK HORNGREN'S COST ACCOUNTING
16th Edition
ISBN: 9780134475998
Author: Rajan
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 15.28P
1. (a)
To determine
Stand-alone cost allocation method:
The stand-alone cost allocation method is a method of allocating the common costs. This method uses the data that relates to each user of a cost object as a separate entity to determine the weights used in alloting the costs.
Incremental cost allocation method:
The incremental method of alloting the costs is that method which makes a ranking of the user objects in the order of the most responsible user.
To determine: The allocation of revenue from the B+R package to each product of D using (a) Stand-alone method, (b) incremental method with B and R in turn as the primary product.
1. (b)
To determine
The allocation of revenue from the B+R package to each product of D using incremental method with B and R in turn as the primary product.
2. (a)
To determine
The allocation of revenue from the C+R package to each product of D using Stand-alone method.
2. (b)
To determine
The allocation of revenue from the C+R package to each product of D using incremental method with C and R in turn as the primary product.
3.
To determine
The most appropriate method to allocate revenues among the product D and the reason for it.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Revenue allocation. Fang Inc. produces and sells DVDs to business people and students who are planning extended stays in China. It has been very successful with two DVDs: Beginning Mandarin and Conversational Mandarin. It is introducing a third DVD, Reading Chinese Characters. It has also decided to market its new DVD in two different packages grouping the Reading Chinese Characters DVD with each of the other two language DVDs. Information about the separate DVDs and the packages follow.
Studio Inc. produces and sells software to students wishing to learn German. It has been very successful with two products: Beginning German and Conversational German. It is introducing a third product line: German for Business. It has decided to market its new product line in two different packages grouping German for Business with each of the other two language products and all three products together. Information about the separate software products and the packages follow.
Software
Selling Price
Beginning German
$100
Conversational German
$120
German for Business
$150
Beginning German and German for Business
$180
Conversational German and German for Business
$240
Beginning German, Conversational German and German for Business
$300
Using the selling prices, allocate revenues from the Beginning German and German for Business Package to each software in that package using (a) the stand-alone method and (b) the incremental method (lowest…
Studio Inc. produces and sells software to students wishing to learn German. It has been very successful with two products: Beginning German and Conversational German. It is introducing a third product line: German for Business. It has decided to market its new product line in two different packages grouping German for Business with each of the other two language products and all three products together. Information about the separate software products and the packages follow.
Software
Selling Price
Beginning German
$100
Conversational German
$120
German for Business
$150
Beginning German and German for Business
$180
Conversational German and German for Business
$240
Beginning German, Conversational German and German for Business
$300
Using the selling prices, allocate revenues from the Beginning German and German for Business Package to each software in that package using (a) the stand-alone method and (b) the incremental method (lowest…
Chapter 15 Solutions
EBK HORNGREN'S COST ACCOUNTING
Ch. 15 - Prob. 15.1QCh. 15 - Describe how the dual-rate method is useful to...Ch. 15 - How do budgeted cost rates motivate the...Ch. 15 - Give examples of allocation bases used to allocate...Ch. 15 - Why might a manager prefer that budgeted rather...Ch. 15 - To ensure unbiased cost allocations, fixed costs...Ch. 15 - Prob. 15.7QCh. 15 - What is conceptually the most defensible method...Ch. 15 - Distinguish between two methods of allocating...Ch. 15 - What are the challenges of using the incremental...
Ch. 15 - Prob. 15.11QCh. 15 - What is one key way to reduce cost-allocation...Ch. 15 - Describe how companies are increasingly facing...Ch. 15 - Distinguish between the stand-alone and the...Ch. 15 - Identify and discuss arguments that individual...Ch. 15 - Single-rate versus dual-rate methods, support...Ch. 15 - Single-rate method, budgeted versus actual costs...Ch. 15 - Dual-rate method, budgeted versus actual costs and...Ch. 15 - Support-department cost allocation; direct and...Ch. 15 - Support-department cost allocation, reciprocal...Ch. 15 - Direct and step-down allocation. E-books, an...Ch. 15 - Reciprocal cost allocation (continuation of...Ch. 15 - Allocation of common costs. Evan and Brett are...Ch. 15 - Allocation of common costs. Gordon Grimes, a...Ch. 15 - Revenue allocation, bundled products. Couture Corp...Ch. 15 - Allocation of common costs. Jim Dandy Auto Sales...Ch. 15 - Single-rate, dual-rate, and practical capacity...Ch. 15 - Prob. 15.28PCh. 15 - Fixed-cost allocation. Central University...Ch. 15 - Allocating costs of support departments; step-down...Ch. 15 - Support-department cost allocations;...Ch. 15 - Common costs. Tate Inc. and Booth Inc. are two...Ch. 15 - Prob. 15.33PCh. 15 - Support-department cost allocations;...Ch. 15 - Revenue allocation, bundled products. Boca Resorts...Ch. 15 - Support-department cost allocations; direct,...
Knowledge Booster
Similar questions
- Q1. Murray furniture store sells couches as a retailer. The wholesale cost to them of their most popular model of couch varies depending on how many they purchase for sale. For the first 200 couches the cost is $299 each; for the next 200 couches it drops to $250 each; and for every couch after that it costs $225. Create an excel function using the IF function to show the gross profit under the following scenarios: a. b. It sells at a price of $650 and 350 units are purchased for sale and sold It sells at a price of $625 and 300 units are purchased for sale and sold It sells at a price are $700 and 1,000 units are purchased for sale and sold C.arrow_forwardHans Brinker is assistant vice-president for marketing for Skagen Ice Skate Company (SIS). SIS does all of its own manufacturing in Denmark and then distributes worldwide through its sales office. World prices for foreign sales offices are set by the home office. Brinker is now setting the price list for all U.S. sales offices, and needs prices set for the coming year. The current spot rate is ?? = ???? $ = 5.6050, with a one-year forward rate of ?? = ???? $ = 5.5685. The one-year deposit rates for Danish krone and U.S. dollars are 1.5% and 1.35%, respectively. SIS’s best-selling professional figure skate, the Royal Silver Blade, is currently priced at $450 to U.S. retailers. Current inflation estimates for Denmark and the United States are both about 3%. SIS’s policy is to try to absorb about 50% of all exchange rate-induced price increases, but pass along 100% of all exchange rate price decreases if possible. The world skate business is competitive. Brinker phones you and explains…arrow_forwardPlease explain all options 1) HST is A) Applicable on all invoices you issue but not on vendor invoices B) Applicable on all invoices you pay but not on invoices issued c) 13% is uniformly paid to the federal government in Canada d) A tax you include in your payments to your contractors 2) Competitive advantage can be gained through a) Skimming pricing strategy b) Focusing on distribution of your products in large retail stores c) Customer service enhancements d) Strategically following a low cost strategy 3) Which of the following is not a cash outflow a) Taxes b) Payments for future purchases c) Depreciation d) Payroll costs 4) If cost of goods sold is high relative to sales, it implies a) High variable costs b) That it does not matter c) High profit margin d) High fixed costs 5) Which one of the following is not true about franchising? a) Franchising contracts can include area developers b)Franchisee has full operational freedom c) Franchisor supports the operations of the…arrow_forward
- Customer Latitude and Pricing The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The postal service purchases the souvenir sheets from a supplier for $0.80 each. St. Vincent has been selling the souvenir sheets for $8.00 each and ordinarily sells about 80,000 units. To test the market, the postal service recently priced a new souvenir sheet at $7.00 and sales increased to 93,600 units. Required: 1. What total contribution margin did the postal service earn when it sold 80,000 sheets at a price of $8.00 each? 2. By what percentage did the St. Vincent post office decrease its selling price? By what percentage did unit sales increase? (Round your answers to one-tenth of a percent.) 3. What total contribution margin did the postal service earn when it sold 93,600 sheets at a price of $7.00 each? 4. What was the postal service’s increase (decrease) in total contribution…arrow_forwardWhich of the following is relevant to Kitchenware.com’s decision to accept a special order at a lower sale price from a large customer in China? a. The cost of shipping the order to the customer b. The cost of Kitchenware.com’s warehouses in the United States c. Founder Eric Crowley’s salary d. Kitchenware.com’s investment in its Web sitearrow_forwardA specific model of computer servers are being sold by Company A for $26,900 each, offering trade discounts of 8% and 5% and by Company B for $35,800 each, offering trade discount rates of 13% and 3%. a. Which company offers the servers for a cheaper price? A B b. What further trade discount rate must the company with the higher price provide to match the lower price? 0.00 %arrow_forward
- Number of visitors to the island from January 2007 to May 2007 were 125,000, 125,000, 150,000, 125,000 and 125,000, respectively. (For simplicity, we assume each visitor, on average, purchases one milk shake. (Students can get more elaborate and research the average number of days visitors stay and the average number of couples, versus families with kids). The sales mix and the sales price will be consistent with the first part of the case at 40% small and 60% large with the sales price set at the competitors price of $10 for large and $7 for small (less the resort fee of 10%). SALES BUDGET for 1st qtr January February March 1stqtr Total April May Large shakes expected to be sold: (visitors*.60) Expected sales price ($10*90%) Total sales ($) Small shakes expected to be sold: (visitors * .40) Expected sales price ($7*90%)…arrow_forwardQuestion 1 You have the sole distributor for Lafuma products in Australia (you even got an agreement to prove it). Lately, you noticed that someone is importing the same products in huge quantities from Hong Kong (where it is 40% cheaper) and selling them in Paddy’s, Parklea Market, and other outlets (which are not your retailers) at a substantial discount. Assess the problems that this parallel import has on you. How would this parallel export problem affect Lafuma of France in terms of overall worldwide sales?arrow_forwardThe Camera Shop sells two popular models of digital SLR cameras (Camera A Price: 230, Camera B Price: 310). The sales of these products are not independent of each other, but rather if the price of one increase, the sales of the other will increase. In economics, these two camera models are called substitutable products. The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and prices (P) of each model: NA = 192 - 0.5PA + 0.25PB NB = 305 + 0.08PA - 0.6PB Construct a model for the total revenue and implement it on a spreadsheet. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. Max profit occurs at Camera A price of $ . Max profit occurs at Camera B price of $ .arrow_forward
- Marketing: Wheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products dash– they manage relationships with the bicycle shops to enable them to better meet consumers' needs. The company's sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 600 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns $40,000 plus 2 percent commission on all sales annually. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. Determine the number of salespeople Wheels needs if it has 600 bicycle shop accounts that need to be called on five times per year. Each sales call lasts approximately 3 hours and each sales…arrow_forwardA laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $4.0 per week in the United States and $3.5 per week in Taiwan. The lead time with U.S. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.50 to ship laptops to the United States from Taiwan. Weekly demand is 1,200 laptops, with a standard deviation of 1,000. a. What is the per unit holding cost of a laptop with U.S. production? -------------- per unit b. What is the per unit holding cost of a laptop with production in Taiwan? -------------- per unit c. A laptop requires 30 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $44 per hour, while in Taiwan it is $12. What is the change in cost per laptop if it switches production…arrow_forwardPlease show the solution in good accounting form. Thank you! Dominic Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and remittance of ₱25. The distribution cost is ₱10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, ₱50 per unit ₱ 2,500,000 ₱ 2,875,000 Towel purchases, ₱90 per unit ₱ 337,500 ₱ 360,000 Number of box tops returned 22,500 38,550 Requirements: 1. Compute for the premiums (as an asset) amount for the year ended:A. December 31, 2020B. December 31, 2021 2. Compute for the premiums expense for the year ended:A. December 31, 2020B. December 31, 2021 3. Compute for the premium liability for the year ended:A. December 31, 2020B. December 31, 2021 4. How much net cash did the entity receive (give) with regards to the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of Business AnalyticsStatisticsISBN:9781285187273Author:Camm, Jeff.Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781285187273/9781285187273_smallCoverImage.gif)
Essentials Of Business Analytics
Statistics
ISBN:9781285187273
Author:Camm, Jeff.
Publisher:Cengage Learning,