Concept explainers
a
Introduction:
The responsibility report is prepared by the management to reflect the sales and costs of their respective controllable segment. While preparing the responsibility report, management only considers the controllable costs.
To prepare: The responsibility report for the finishing department.
b
Introduction:
Report C is the type of responsibility report that is prepared by the successive departmental head. It includes the total cost determined in the previous state of operation (Report D).
To prepare: The report C.
c
Introduction:
Report B is the responsibility report prepared by the vice president of the company. It includes the total cost being incurred in all the departments along with additional expenses incurred by the vice president.
To prepare: The report B.
Want to see the full answer?
Check out a sample textbook solutionChapter 25 Solutions
ACCT.PRINCIPLES-WILEYPLUS NEXTGEN
- Tristion Inc. has two production departments, and estimated the following information for the 2022 fiscal year Assembly Dept. Testing Dept. Overhead $1,496,250 $365,625 Direct labour hours 356,250 81,250 Machine hours 80,000 162,500 Currently, the company uses departmental rates to assign overhead costs. Overhead costs are assigned on the basis of direct labour hours for the Assembly Department and machine hours for the Testing Department. For September, the company reported the following actual data: Assembly Dept. Testing Dept. Overhead $107,560 $34,340 Direct labour hours 28,600 6,770 Machine hours 5,700 13,520 Required (A) What are the predetermined overhead rates for each department? (B) Assume that Job R777 used 4 direct labour hours in the Assembly Department and 3 machine hours in the Testing Department. Compute the overhead assigned to Job R777. (C) How much overhead was applied in the month of September? (D)…arrow_forwardExpo manufacturing has two production departments and two support departments. The number of employees for each department is as follows: $35,378 O $28,940 Human Resources Accounting Machining Producing Assembly Producing Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. How much in total support costs would be allocated to assembly, using the step method? The Accounting department is allocated first. $119,000 $34,867 5 10 520 220arrow_forwardKoffler Legal & Consulting Services PLLC., provides legal consulting services to businesses in NYc. They follow a job-costing system with a single direct-cost category (professional labor costs) and a single indirect-cost pool (legal administration costs). Actual professional hours are used as allocation base in order to allocate legal administration costs. Koffler Legal & Consulting Services PLLC., currently has 10 lawyers to perform consulting services. Budgeted and actual amounts for 2019 are as follows: Koffler Legal & Consulting Services PLLC. Budget for 2019 $990,000 $774,000 Professional labor costs Legal administration costs Professional labor-hours billed to customers 18,000 hours Actual Results for 2019 Legal administration costs Professional labor-hours billed to customers $735,000 17,500 $59 per hour Actual professional labor cost rate 1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach, which is a variation from normal costing where…arrow_forward
- Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance Direct cost Engineering Administration Maintenance Using Department Engineering Administration Maintenance Fabrication Total 0 10% 0 $30,000 50% 0 30% Costs $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Assembly 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000arrow_forwardABC Company has two support departments, HR and IS, and two operating departments, Production and Sales. HR department costs are allocated using number of employees, and IS department costs are allocated using Labor hours. For July 2019, the following information is given: Cost Before Allocation Number of Employees Labor Hours HR IS $90,000 $60,000 2,000 Answer: 6,000 Production $360,000 3,000 15,000 Sales $520,000 5,000 9,000 Total $1,030,000 10,000 30,000 Using the Direct method, What IS department cost will be allocated to the Sales departments?arrow_forwardSandhill Company has two service departments (personnel and financial) that provide services for one another as well as for two production departments, assembly and finishing. Data for the month follow: Personnel Financial Assembly Finishing Employees 6 8 18 16 Payroll $16,200 $12,900 $29,600 $28,200 Personnel department costs were $79,700, and financial department costs were $44,300. Sandhill uses employees as the allocation base for personnel department costs and payroll costs for financial department costsarrow_forward
- Sage Products Ltd manufactures goods which could involve any or all of three productiondepartments. These departments are simply entitled X, Y and Z. A direct wages cost percentageabsorption rate for the recovery of production overheads for each department is applied toindividual job costs.Details from the company’s budgets for the year ended 31 March 2021 are as follows: Dept X Dept Y Dept ZIndirect materials $23,000 $35,000 $57,000Indirect wages $21,000 $34,000 $55,000Direct wages $140,000 $200,000 $125,000 Direct labour hours…arrow_forwardFlounder Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president.In January 2022, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown here. Manufacturing Overhead Actual Budget Individual costs—Cutting Department—Seattle Indirect labor $73,100 $69,600 Indirect materials 48,200 45,600 Maintenance 20,900 17,700 Utilities 20,600 16,900 Supervision 22,000 19,600 $184,800 $169,400 Total costs…arrow_forwardYour Companey has two service departments – Personnel and Maintenance. The Maintenance Department's costs of $160,000 are allocated on the basis of standard hours used. The Personnel Department's costs of $40,000 are allocated based on the number of employees. The costs of the operating Departments A and B are $80,000 and $120,000, respectively. Data on standard service hours and number of employees are as follows: Standard Service Maintenance Dept. Personnel Dept. Production Depts. A B Hours used - 400 480 320 Number of Employees 20 - 80 240 What is the cost of the Maintenance Department allocated to Department B using the direct method? What is the cost of the…arrow_forward
- National Marketing Corp. uses a job-order costing system. It has three production departments, X, Y, and Z. The manufacturing cost budget for 2019 is as follows: Dept. X Dept. Y Dept. Z Direct Materials 600,000 400,000 200,000 Direct Labor 200,000 500,000 400,000 Manufacturing Overhead 600,000 100,000 200,000 For Job No. 01-90 which was completed in 2019, direct materials cost was P75,000 and direct labor cost was as follows: Dept. X P40,000 Dept. Y 100,000 Dept. Z 20,000 The corporation applies manufacturing overhead to each order on the basis of direct labor cost, using departmental rates predetermined at the beginning of the year based on the manufacturing cost budget. The total manufacturing cost of Job No. 01-90 which was completed in 2019 isarrow_forwardARKANSAS CORPORATION …… is a company that produces machinery to customer order. Its job costing system, using normal costing, has two direct cost categories, direct materials and direct labor, and one indirect cost pool, manufacturing overhead, allocated using a budgeted rate based on direct labor costs. Budgeted and actual information for 2016 are as follows: Budget Actual Direct Labor $420,000 $400,000 Manufacturing overhead $252,000 $186,840 At the end of 2016, the ending work in process consisted of: Ending Work In Process: Direct Materials $64,000 Direct Labor 50,000 Overhead 30,000 $144,000 There were no beginning work-in-process or finished-goods inventories. Ending Finished Goods showed a balance of $156,000, which included overhead costs of $25,200. Cost of goods sold was $1,600,000, of which $184,800 consisted of applied overhead.…arrow_forwardHill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine hours in the Machining Department and on the basis of direct labor hours in the Assembly Department. At the beginning of 2020, the following estimates were provided for the coming year: Direct labor hours Machine hours Direct labor cost Manufacturing overhead costs Machining Direct labor hours Machine hours Direct material cost Direct labor cost 10,000 DLH 100,000 MH $80,000 $250,000 The accounting records of the company show the following data for Job # 846: Machining 50 DLH 170 MH Assembly 90,000 DLH 5,000 MH $2,700 $400 $720,000 $360,000 Assembly 120 DLH 10 MH $1,600 $900 4 Required: 1. Compute the manufacturing overhead allocation rate for each department. 2. Compute the total cost of Job #846. 3. Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education