MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 9, Problem 2PSB
Harmon’s has several departments that occupy all floors of a two-story building that includes a basement floor. Harmon rented this building under a long-term lease negotiated when rental rates were low. The departmental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occupancy costs recorded in this account for the current period follow.
The building has 7,500 square feet on each of the upper two floors but only 5,000 square feet in the basement. In prior periods, the
20,000 square feet to find an average cost of $23.25 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupies.
Jordan Style manages a department that occupies 2,000 square feet of basement floor space. In discussing the departmental reports with other managers, she questions whether using the same rate per square for all departments makes sense different floor space has different values. Style checked a recent real estate report of average local rental costs for similar space that shows first-floor space worth $40 per square foot, second-floor space worth $20 per square foot, and basement space worth $10 per square foot (excluding costs for lighting and Cleaning).
Required
1. Allocate occupancy costs to Style’s department using the current allocation method.
2. Allocate the building rent cost to Style’s department in proportion to the relative market value of the floor space. Allocate to Style’s department the lighting and cleaning costs in proportion to the square feet occupied (ignoring floor space market values). Then, compute the total occupancy cost allocated to Style’s department.
Analysis Component
3. Which allocation method would you prefer if you were a manager of a basement department?
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National Bank has several departments that occupy both floors of a two-story building. The departmental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occupancy costs recorded in this account for the current period follow.
Depreciation—Building
$
18,000
Interest—Building mortgage
27,000
Taxes—Building and land
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The building has 4,000 square feet on each floor. In prior periods, the accounting manager merely divided the $66,000 occupancy cost by 8,000 square feet to find an average cost of $8.25 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. Diane Linder manages a first-floor department that occupies 1,000 square feet, and Juan Chiro manages a second-floor department that…
National Bank has several departments that occupy both floors of a two-story building. The departmental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occupancy costs recorded in this account for the current period follow.
Depreciation—Building
$
18,000
Interest—Building mortgage
27,000
Taxes—Building and land
9,000
Gas (heating) expense
3,000
Lighting expense
3,000
Maintenance expense
6,000
Total occupancy cost
$
66,000
The building has 4,000 square feet on each floor. In prior periods, the accounting manager merely divided the $66,000 occupancy cost by 8,000 square feet to find an average cost of $8.25 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. Diane Linder manages a first-floor department that occupies 1,000 square feet, and Juan Chiro manages a second-floor department that…
A mortgage service office has the following four activities involved in approving a loan application.
Note that a working day is 8 hours and there are 60 minutes in one hour.
Activity
A Property survey
B. Credit report
C. Title search
D. Final decision
Time (minutes)
24
37
27
37
Activities B and C are combined together and assigned to two employees, while the other two
employees are responsible for activities A and D respectively. What is the mortgage office's direct
labor utilization (DLU) under this setting?
Numbers only (eg.. 0.445 is acceptable, but NOT 44.5%), keep three decimals if not exact, either round up
or down is ok
Chapter 9 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 9 - Prob. 1MCQCh. 9 - Prob. 2MCQCh. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - 5. Using the data in question 4, Department X’s...Ch. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQ
Ch. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 9DQCh. 9 - Prob. 10DQCh. 9 - Prob. 11DQCh. 9 - Prob. 12DQCh. 9 - Prob. 13DQCh. 9 - Prob. 14DQCh. 9 - Prob. 15DQCh. 9 - Prob. 16DQCh. 9 - Prob. 17DQCh. 9 - Prob. 18DQCh. 9 - Prob. 19DQCh. 9 - Prob. 20DQCh. 9 - Prob. 1QSCh. 9 - Prob. 2QSCh. 9 - Prob. 3QSCh. 9 - In each blank next to the following terms, place...Ch. 9 - Prob. 5QSCh. 9 - In each blank to the following terms, place the...Ch. 9 - Car Mart pays $130,000 rent ecah year for its...Ch. 9 - Prob. 8QSCh. 9 - Compute return on investment for each of the...Ch. 9 - Computing residual income A1 Refer to the...Ch. 9 - Prob. 11QSCh. 9 - Computing profit margin and investment turnover A2...Ch. 9 - Classify each the performance measures below into...Ch. 9 - Prob. 14QSCh. 9 - Prob. 15QSCh. 9 - Prob. 16QSCh. 9 - Prob. 17QSCh. 9 - Prob. 18QSCh. 9 - Prob. 19QSCh. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Jansen Company reports the following for its ski...Ch. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Exercise 22-16 Performance measures-balanced...Ch. 9 - Oakwood Company produces maple bookcases to...Ch. 9 - Best Ink produces ink-jet printers for personal...Ch. 9 - The trailer division of Baxter Bicycles makes bike...Ch. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Prob. 21ECh. 9 - Prob. 1PSACh. 9 - National Bank has several departments that occupy...Ch. 9 - Prob. 3PSACh. 9 - Prob. 4PSACh. 9 - Prob. 5PSACh. 9 - Prob. 1PSBCh. 9 - Harmons has several departments that occupy all...Ch. 9 - Prob. 3PSBCh. 9 - Sadar Company operates a store with two...Ch. 9 - Prob. 5PSBCh. 9 - Santana Reys two departments, computer consulting...Ch. 9 - Prob. 1BTNCh. 9 - Prob. 2BTNCh. 9 - Prob. 3BTNCh. 9 - Prob. 4BTNCh. 9 - Prob. 5BTNCh. 9 - Prob. 6BTNCh. 9 - Brian Lintons company, United By Blue, sells...Ch. 9 - Prob. 8BTNCh. 9 - Prob. 9BTN
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