Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Direct Costs $135,000 85,000 47,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining Assembly 0.7 0.1 0.6 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). 0.3 0.1

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Department Machining Assembly Maintenance Cafeteria Direct Costs $135,000 85,000 47,000 36,000 Proportion of Services Used by Maintenance Cafeteria Machining Assembly 0.7 0.1 0.6 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Maintenance. b. The allocations are made in the reverse order (starting with Cafeteria). 0.3 0.1

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 5E: Crystal Scarves Co. produces winter scarves. The scarves are produced in the Cutting and Sewing...

See similar textbooks

Similar questions

A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. 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 ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Crystal Scarves Co. produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table: Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department.
Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
Yo-Down Inc. produces yogurt. Information related to the companys yogurt production follows: Support Department 1s costs total 142,000. Using the direct method of support department cost allocation, determine the costs from Support Department 1 that should be allocated to each production department.
Journalizing the distribution of service department costs to production departments Required: Using your solution to P4-7, prepare journal entries for the following: The distribution of the total factory overhead of $79,400 to the individual production and service departments where it originated. The distribution of the Building Maintenance overhead to the appropriate other departments. The distribution of the Factory Office overhead to the appropriate other departments.
Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs Repair $ 147,600 112, 200 48,300 90,300 Required A Required B Required: Use the step method to allocate the service costs, using the following: 0 0.6 From: Proportion of Services Used by Quality Control Fabricating a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Complete this question by entering your answers in the tabs below. Repair 0.2 0 Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be…
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Proportion of Services Used by Quality Direct Costs Repair Control Fabricating $ 148,600 114, 200 49,200 92,000 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Quality control Complete this question by entering your answers in the tabs below. Repair Total costs allocated 8 0.8 S Required A Required B Use the step method to allocate the service costs, using the following: The allocations are made in the reverse order (starting with Quality Control). Note: Amounts to be…
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Required A Required B Direct Costs Repair $ 136,600 102, 200 43,800 81,800 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Complete this question by entering your answers in the tabs below. $ $ Repair Proportion of Services Used by Quality Control 0 0.8 Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be indicated by a minus…