Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 6, Problem 4E
To determine
Select the activity base that would be most appropriate for each of the given costs.
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Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows:
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Machine Maintenance
Total cost
$576,000
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$3,825,000
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The following estimates that are related to the operating departments is as follows:
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Total
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properties
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# of employees
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128
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225
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485
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# of billable hours
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23,000
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Total overhead cost*
$
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The Company uses the…
Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system:
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Overhead Costs
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Staff Salaries
$500,000
Selling and administration overheads
200,000
Total Overhead Costs
$700,000
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Activity Cost Pool
Activity Measure
Total Activity for the Year
Product design
Number of new designs
500 new designs
Order Processing
Number of Customer orders
700 orders
Customer Support
Number of Customers
400 customers
Others
Organization sustaining activity
Not applicable
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Distribution of Resource Consumption across Activities
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Product Design
Order Processing
Customer Support
Other
Total
Staff Salaries
40%
30%
20%
10%
100%
Selling and administration overheads
30%
10%
20%
40%
100%
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During the year Sunshine Company completed three individual orders for a new customer, Tarpaper…
Jose Ruiz manages a car dealer’s service department. His department is organized as a cost center. Costs for a recent quarter are shown below. List the costs that would appear on a responsibility accounting report for the service department. Cost of parts . $22,400 Mechanics’ wages . 14,300 Manager’s salary 8,000 Building depreciation (allocated) 4,500 Shop supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,200 Utilities (allocated) . 800 Administrative costs (allocated) 2,200
Chapter 6 Solutions
Managerial Accounting
Ch. 6 - Describe how total variable costs and unit...Ch. 6 - Which of the following costs would be classified...Ch. 6 - Describe how total fixed costs and unit fixed...Ch. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - What does operating leverage measure, and how is...
Ch. 6 - High-low method The manufacturing costs of...Ch. 6 - Contribution margin Waite Company sells 250,000...Ch. 6 - Prob. 3BECh. 6 - Prob. 4BECh. 6 - Prob. 5BECh. 6 - Operating leverage Haywood Co. reports the...Ch. 6 - Margin of safety Jorgensen Company has sales of...Ch. 6 - Classify Costs Following is a list of various...Ch. 6 - Identify cost graphs The following cost graphs...Ch. 6 - Identify activity bases For a major university,...Ch. 6 - Prob. 4ECh. 6 - Identify fixed and variable costs Intuit Inc....Ch. 6 - Relevant range and fixed and variable costs Child...Ch. 6 - High-low method Ziegler Inc. has decided to use...Ch. 6 - Prob. 8ECh. 6 - Contribution margin ratio Young Company budgets...Ch. 6 - Contribution margin and contribution margin ratio...Ch. 6 - Prob. 11ECh. 6 - Break-even sales Anheuser-Busch InBev SA/NV (BUD)...Ch. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Break-even analysis for a service company3 Sprint...Ch. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Prob. 22ECh. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - Prob. 25ECh. 6 - Classify costs Seymour Clothing Co. manufactures a...Ch. 6 - Break-even sales under present and proposed...Ch. 6 - Prob. 3PACh. 6 - Prob. 4PACh. 6 - Prob. 5PACh. 6 - Contribution margin, break-even sales,...Ch. 6 - Classify costs Cromwell Furniture Company...Ch. 6 - Prob. 2PBCh. 6 - Prob. 3PBCh. 6 - Prob. 4PBCh. 6 - Prob. 5PBCh. 6 - Contribution margin, break-even sales,...Ch. 6 - Analyze Global Airs cost-volume-profit...Ch. 6 - Prob. 2MADCh. 6 - Prob. 3MADCh. 6 - Prob. 4MADCh. 6 - Prob. 1TIFCh. 6 - Prob. 3TIFCh. 6 - Profitability strategies Somerset Inc. has...Ch. 6 - Prob. 5TIFCh. 6 - Analysis of costs for a shipping department Sales...Ch. 6 - Taylor Corporation is analyzing the cost behavior...Ch. 6 - Prob. 2CMACh. 6 - Bolger and Co. manufactures large gaskets for the...Ch. 6 - Prob. 4CMA
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