2) Teecorp Company provides the following ABC costing information: Activities Labor Total Costs $320,000 Gas $36,000 $40.000 $396.000 Invoices Total costs Activity-cost drivers 8,000 hours 6,000 gallons 2,500 invoices The above activities used by their three departments are: Lawn Department 2,500 hours 1,700 gallons 1,600 invoices Labor Gas Invoices Bush Department 1,200 hours 800 gallons 400 invoices Plowing Department 4,300 hours 3,500 gallons 500 invoices a. How much of the labor cost will be assigned to the Bush Department? b. If labor hours are used to allocate the non-labor, overhead costs, what is the overhead allocation rate? c. How much of invoice cost will be assigned to the Bush Department? d. How much of the gas cost will be assigned to the Lawn Department? e. How much of the total cost will be assigned to the Plowing Department?

2) Teecorp Company provides the following ABC costing information: Activities Labor Total Costs $320,000 Gas $36,000 $40.000 $396.000 Invoices Total costs Activity-cost drivers 8,000 hours 6,000 gallons 2,500 invoices The above activities used by their three departments are: Lawn Department 2,500 hours 1,700 gallons 1,600 invoices Labor Gas Invoices Bush Department 1,200 hours 800 gallons 400 invoices Plowing Department 4,300 hours 3,500 gallons 500 invoices a. How much of the labor cost will be assigned to the Bush Department? b. If labor hours are used to allocate the non-labor, overhead costs, what is the overhead allocation rate? c. How much of invoice cost will be assigned to the Bush Department? d. How much of the gas cost will be assigned to the Lawn Department? e. How much of the total cost will be assigned to the Plowing Department?

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

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2. Columbus Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Labor $384,000 8,000 hours Gas $36,000 6,000 gallons Invoices $180,000 7,500 invoices Total costs $600,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,400 hours 4,100 hours Gas 1,800 gallons 1,000 gallons 3,200 gallons Invoices 1,300 invoices 300 invoices 5,900 invoices How much of invoice cost will be assigned to the Bush Department? A) $7,200 B) $141,600 C) $31,200 D) $180,000 3. Milan Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost driver Activity level Supervision of direct labor $624,000 Direct labor-hours 940,000 Machine maintenance $100,000 Machine-hours 840,000 Facility rent $216,000 Square feet of area 140,000 Total overhead costs $940,000 The accounting records…
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs $390,000 $150,000 $103,750 $17,250 $661,000 Account inquiry Account billing Account verification accounts Correspondence letters Total costs The above activities are used by Departments A and B as follows: Department A 2,900 hours 900,000 lines Account inquiry hours Account billing lines Account verification accounts Correspondence letters How much of the account inquiry cost will be assigned to Department A? OA. $132,000 O B. $390,000 O C. $195,000 O D. $87,000 10,000 accounts 2,000 letters Activity - cost drivers 13,000 hours 6,000,000 lines 50,000 accounts 3,000 letters Department B 4,400 hours 750,000 lines 8,000 accounts 2,400 letters
Dog's Company provides the following ABC costing information: Activities Total Costs Activity - cost drivers Labor $320,000 8,000 hours Gas $36, 000 6,000 gallons Invoices $ 40,000 2,500 invoices Total costs $396,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,200 hours 4, 300 hours Gas 1,700 gallons 800 gallons 3,500 gallons Invoices 1,600 invoices 400 invoices 500 invoices How much of the total costs will be assigned to the Lawn Department? Group of answer choices $134,500 $134, 600 $135,800 $135, 600
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(Appendix 4B) Assigning Support Department Costs by Using the Direct Method Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Support Departments Producing Departments S1 S2 Assembly Painting Direct costs $200,000 $140,000 $115,000 $96,000 Normal activity: Square footage — 500 1,875 625 Machine hours 337 — 3,200 12,800 Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratios—one for Assembly and the other for Painting.) Round your answers to two decimal places. Assembly Painting S1 fill in the blank 1 fill in the blank 2 S2 fill in the blank 3 fill in the blank 4 2. Allocate the support department…
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Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Materials Personnel Manufacturing Packaging Employees Square Feet Asset Values $ 7,900 4,740 45,820 20,540 $ 79,000 38 19 76 57 64,750 9,250 92,500 18,500 Total 190 185,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Indirect Expense Supervision Utilities Cost Allocation Base $ 84,400 Number of employees 69,000 Square feet occupied 32,000 Asset values $ 185,400 Insurance Total Allocate each of the three indirect expenses to the four departments. Supervision Cost to be Allocated Allocation Base Percent of Allocation Base Allocated Cost expenses Department Numerator Denominator % of Total Materials Personnel Manufacturing Packaging Totals Cost to be Allocated Utilities Allocation Base Percent of Allocation Base Allocated Cost Department Numerator Denominator % of Total…
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $320,000 16,000 hours Account billing $200,000 4,000,000 lines Account verification accounts $173,250 70,000 accounts Correspondence letters $24,000 4,000 letters Total costs $717,250 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,700 hours 4,200 hours Account billing lines 950,000 lines 750,000 lines Account verification accounts 8,500 accounts 6,500 accounts Correspondence letters 1,400 letters 1,800 letters How much of the account billing cost will be assigned to Department A? How much of the account verification accounts cost will be assigned to Department B?