Cost Management
8th Edition
ISBN: 9781259917028
Author: BLOCHER, Edward
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 7, Problem 29E
1.
To determine
Ascertain the cost allocated using direct method to Production 1 and Production 2.
2.
To determine
Ascertain the cost allocated using step method to Production 1 and Production 2.
3.
To determine
Ascertain the cost allocated using reciprocal method to Production 1 and Production 2.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Blossom Tailors sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set
up a Wi-Fi hot spot. It offers two bundles with the following terms.
1.
2.
Blossom Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection
service contract is $506. The standalone selling price of the tablet is $234 (the cost to Blossom Tailors is $167). Blossom
Tailors sells the Internet access service independently for an upfront payment of $324. On January 2, 2025, Blossom Tailors
signed 90 contracts, receiving a total of $45,540 in cash.
Blossom Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to
the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $612. Blossom Tailors
provides the 3-year tablet service plan as a separate product with a standalone selling price of $155.…
During 2025, Cullumber Company started a construction job with a contract price of $1,620,000. The job was completed in 2027. The
following information is available.
2025
2026
2027
Costs incurred to date
$373,700
$749,360 $1,070,000
Estimated costs to complete
636,300
352,640
-0-
Billings to date
302,000
907,000
1,620,000
Collections to date
268,000
815,000
1,425,000
(b)
Prepare all necessary journal entries for 2026. (Credit account titles are automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For costs incurred use account
Materials, Cash, Payables. List all debit entries before credit entries.)
Account Titles and Explanation
Debit
Credit
(To record cost of construction.)
(To record progress billings.)
(To record collections.)
(To recognize revenue.)
On March 10, 2025, Carla Vista Company sold to Vaughn Hardware 220 tool sets at a price of $55 each (cost $29 per set) with terms
of n/60, f.o.b. shipping point. Carla Vista allows Vaughn to return any unused tool sets within 60 days of purchase. Carla Vista
estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets
can be resold at a profit. On March 25, 2025, Vaughn returned 7 tool sets and received a credit to its account.
(a)
Prepare journal entries for Carla Vista to record (1) the sale on March 10, 2025, (2) the return on March 25, 2025, and (3) any
adjusting entries required on March 31, 2025 (when Carla Vista prepares financial statements). Carla Vista believes the original
estimate of returns is correct. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If
no entry is required, select "No entry" for the account titles and enter O for the amounts.…
Chapter 7 Solutions
Cost Management
Ch. 7 - Prob. 1QCh. 7 - Explain the difference between joint products and...Ch. 7 - Prob. 3QCh. 7 - What are the three methods of departmental cost...Ch. 7 - Prob. 5QCh. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - What are the limitations of joint product and...Ch. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 -
What is the amount of service department cost...Ch. 7 - Prob. 12BECh. 7 - Prob. 13BECh. 7 - Prob. 14BECh. 7 - Prob. 15BECh. 7 - Prob. 16BECh. 7 - Prob. 17BECh. 7 - Prob. 18BECh. 7 - Prob. 19BECh. 7 - Brief Exercises 7-17 through 7-20 require the...Ch. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Great Ape Glassworks manufactures glass used for...Ch. 7 - Cost allocation is often the centerpiece of...Ch. 7 - Prob. 27ECh. 7 - Prob. 28ECh. 7 - Robinson Products Company has two service...Ch. 7 - Donation of blood through the American Red Cross...Ch. 7 - Tango Company produces joint products M, N, and T...Ch. 7 - Arkansas Corporation manufactures liquid chemicals...Ch. 7 - Webster Company produces 25,000 units of product...Ch. 7 - Marin Company produces two software products...Ch. 7 - Logan Products has two production...Ch. 7 - McKeoun Enterprises is a large machine tool...Ch. 7 - Barfield Corporation prepares business plans and...Ch. 7 - Solexx Corporation allocates its service...Ch. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Prob. 49PCh. 7 - Prob. 50P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Cullumber Company sells goods on credit that cost $301,000 to Mark Company for $402,000 on January 2, 2025. The sales price includes an installation fee, which has a standalone selling price of $37,000. The standalone selling price of the goods is $365,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. Date Account Titles and Explanation Jan. 2, 2025 Accounts Receivable Sales Revenue Unearned Service Revenue (To record sales on account) Jan. 2, 2025 Cost of Goods Sold (b). Inventory (To record cost of goods sold) Debit 402000 301000 Credit 365000 37000 301000 Cullumber prepares an income statement for the first quarter of 2025, ending on March 31, 2025 (installation was completed on June 18, 2025). How much revenue should Cullumber recognize related to its sale to Mark? First Quarter Sales revenue $ Cost of goods sold Gross profit $ LAarrow_forwardCullumber Company sells goods on credit that cost $301,000 to Mark Company for $402,000 on January 2, 2025. The sales price includes an installation fee, which has a standalone selling price of $37,000. The standalone selling price of the goods is $365,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2025. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 2, 2025 Jan. 2, 2025 (To record sales on account) (To record cost of goods sold) Debit Creditarrow_forwardThere are two main categories of statistics: inferential statistics and descriptive statistics. What is inferential statistics? Can you give an example of its use?arrow_forward
- What is the Empirical Rule and why is it important?arrow_forwarddiscuss the difficulty companies face in identifying the five steps of revenue recognition given the judgmental nature of each process.arrow_forwardItems 1 through 6 below present various internal control strengths or internal control deficiencies. For each, indicate whether the item represents an internal control strength for the revenue cycle. internal control deficiency for the revenue cycle. For each item that you answered (B), explain the nature of the deficiency. Required Complete the table below Cash receipts received in the mail are received by a secretary with no record-keeping responsibility. Cash receipts received in the mail are forwarded unopened with remittance advices to accounting. The cash receipts journal is prepared by the treasurer’s department. Cash is deposited weekly.arrow_forward
- Items 1 through 6 below present various internal control strengths or internal control deficiencies. For each, indicate whether the item represents an A. internal control strength for the revenue cycle. B. internal control deficiency for the revenue cycle. C. For each item that you answered (B), explain the nature of the deficiency. Required 1. Complete the table below Item Strength/ Deficiency If deficient, explain and provide a recommendation to improve the deficiency Example: Write-offs of accounts receivable are approved by the controller. Deficiency This is an inappropriate segregation of duties. The controller has recordkeeping responsibilities. The write-off of accounts involves authorization responsibilities. The write-offs should be approved by the credit department, not the controller. Once shipment occurs and is recorded in the sales journal, all shipping documents are marked "recorded" by the accounting staff. Sales returns are presented to a sales department clerk who…arrow_forwardItems 1 through 6 below present various internal control strengths or internal control deficiencies. For each, indicate whether the item represents an internal control strength for the revenue cycle. internal control deficiency for the revenue cycle. For each item that you answered (B), explain the nature of the deficiency. Required Complete the table below Item Strength/ Deficiency If deficient, explain and provide a recommendation to improve the deficiency Example: Write-offs of accounts receivable are approved by the controller. Deficiency This is an inappropriate segregation of duties. The controller has recordkeeping responsibilities. The write-off of accounts involves authorization responsibilities. The write-offs should be approved by the credit department, not the controller. Once shipment occurs and is recorded in the sales journal, all shipping documents are marked “recorded” by the accounting staff. Sales returns are…arrow_forwardBean Counter, LLP, has served for over 10 years as the auditor of the financial statements of Penny for Your Thoughts Credit Union. The firm is conducting its audit planning for the current fiscal year and is in the process of performing risk assessment procedures. Based on inquiries and other information obtained, the auditors learned that the credit union is finalizing an acquisition of a smaller credit union located in another region of the province. Management anticipates that the transaction will close in the third quarter, and, while there will be some challenges in integrating the IT systems of the acquired credit union with Penny for Your Thoughts systems, the bank should realize a number of operational cost savings over the long term. During the past year, the credit union has expanded its online service options for customers, who can now remotely deposit funds into and withdraw funds from chequing and savings accounts. The system has been well received by customers and the…arrow_forward
- Bean Counter, LLP, has served for over 10 years as the auditor of the financial statements of Penny for Your Thoughts Credit Union. The firm is conducting its audit planning for the current fiscal year and is in the process of performing risk assessment procedures. Based on inquiries and other information obtained, the auditors learned that the credit union is finalizing an acquisition of a smaller credit union located in another region of the province. Management anticipates that the transaction will close in the third quarter, and, while there will be some challenges in integrating the IT systems of the acquired credit union with Penny for Your Thoughts systems, the bank should realize a number of operational cost savings over the long term. During the past year, the credit union has expanded its online service options for customers, who can now remotely deposit funds into and withdraw funds from chequing and savings accounts. The system has been well received by customers and the…arrow_forwardFor each scenario, identify possible audit engagement acceptance/continuance risk(s) (A–F). Audit engagement acceptance/continuance risk(s): Firm’s ability to audit client (scope limitation) Firm’s reputation risk Non-compliance with ethical standards Additional duty of care/increased legal exposure Auditor’s lack of sufficient expertise in relation to the industry Integrity of management Note: Each scenario will have one or multiple risks that need to be considered. Scenario Risk(s) SuperService Inc. offers electronics repair service and is required by its bank to have an audit for the first time. The bank has agreed to provide a loan to SuperService Inc. if it adheres to the covenant requirements, which include providing a set of audited financial statements. FastMoney Inc. has just fired its current auditor, citing that it was not happy with the services that it was receiving. FastMoney Inc. is a short-term loan company that has grown rapidly. The…arrow_forwardFor each scenario, identify possible audit engagement acceptance/continuance risk(s) (A–F). Audit engagement acceptance/continuance risk(s): Firm’s ability to audit client (scope limitation) Firm’s reputation risk Non-compliance with ethical standards Additional duty of care/increased legal exposure Auditor’s lack of sufficient expertise in relation to the industry Integrity of management Note: Each scenario will have one or multiple risks that need to be considered. Scenario Risk(s) SuperService Inc. offers electronics repair service and is required by its bank to have an audit for the first time. The bank has agreed to provide a loan to SuperService Inc. if it adheres to the covenant requirements, which include providing a set of audited financial statements. FastMoney Inc. has just fired its current auditor, citing that it was not happy with the services that it was receiving. FastMoney Inc. is a short-term loan company that has grown rapidly. The…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License