2- 4.A. Salsa has three service departments, the Maintenance Department, the IT Departmentand HR Department. Salsa has also two production departments, the Cutting departmentand the Mixing Department. The usage of the three service departments' output for the yearis as follows:Provider of ServiceUser of ServiceMaintenanceITHRMaintenance5 %5 %IT5%HR|Cutting45 %55%25%Mixing55 %40%65%The budgeted costs in the three service departments for the year as follows:Maintenance: $ 120,000IT: $ 200,000HR: $ 300,000Use step-down method to allocate the budgeted costs of the three servicedepartments on production departments.

In cost accounting for cost allocation three methods are used:- Direct method: The direct method is…

Answered: 4.A. Salsa has three service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

4.A. Salsa has three service departments, the Maintenance Department, the IT Department and HR Department. Salsa has also two production departments, the Cutting department and the Mixing Department. The usage of the three service departments' output for the year is as follows: Provider of Service User of Service Maintenance IT HR Maintenance 5 % 5 % IT 5 % HR Cutting 45 % 55% 25% Mixing 55 % 40% 65% The budgeted costs in the three service dep hents for the year as follows: Maintenance: $ 120,000 IT: $ 200,000 HR: $ 300,000 Use step-down method to allocate the budgeted costs of the three service departments on production departments.
Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows: ---Provider of Service---- User of Service / IT /HR IT / - /15 % HR / 5 % / - Cutting / 45 % / 25 % Mixing / 50 % / 60 % The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments.
Required Information [The following information applies to the questions displayed below.] 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 Fabricating Finishing Direct Costs $ 143,600 Total Allocated Costs 104, 200 44,700 83,500 Repair 0 0.8 Proportion of Services Used by Quality Control 0.2 8 Fabricating Finishing 0.5 0.1 Required: Compute the allocation of service department costs to producing departments using the direct method. Note: Do not round Intermediate calculations. Round your final answers to the nearest whole dollar. 0.3 0.1
RST LTD has two production departments: Machining and Finishing. There are three service departments: Human Resources (HR), Maintenance and Design. The budget costs in three service departments are as follows: Design $ HR Maintenance $ $ Variable 1,00,000 1,60,000 1,00,000 Fixed 4,00,000 3,00,000 6,00,000 5,00,000 4,60,000 7,00,000 The usage of these Service Department's output during the years just completed is as follows: Provision of Service Output ( in hours of service) Providers of Service Users of Service HR Maintenance Design HR Maintenance 500 Design Machining Finishing 500 500 4,000 3,500 4,500 5,000 4,000 1,500 Total 10,000 8,000 6,000 Required : (i) Use the direct method to re-apportion RST Ltd's service department cost to its production departments. Determine the proper sequence to use in re-apportioning the firm's service department (ii) cost by step-down method. Use the step-down method to reapportion the firm's service department cost according to (ii) Hours of Service
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 71,000 0.60 0.10 0.30 S2 $111,000 0.10 0.40 0.50 P1 $171,000 P2 $151,000 Under the direct method of cost allocation, the amount of S1 costs allocated to S2 would be: Multiple Choice $0. $4,440. $11,100. $42,600.
Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows: Provider of Service User of Service IT HR IT - 15 % HR 5 % - Cutting 45 % 25 % Mixing 50 % 60 % The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments. Please donot provide solution in image format provide solution in step by step and fast solution
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Direct Departmentcosts S1 S1 S2 P1 P2 60,000 100,000 0.20 160,000 140,000 S2 P1 P2 0.700.10 0.2O 0.300.50 Under the step-method of cost allocation, the amount of costs allocated from S2 to P2 would be: Select one: a. $53,250. b. $62,500. c. $50,000 d. $88,750. SSSS
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 72,000 0.70 0.10 0.20 S2 $ 157,000 0.20 0.30 0.50 P1 $ 214,000 P2 $ 179,000 Under the step method of allocation, the total amount of service costs allocated to producing departments would be: Multiple Choice $174,000. $178,600. $74,000. $229,000.
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 148,000 0.70 0.10 0.20 S2 $ 179,000 0.20 0.30 0.50 P1 $ 209,000 P2 $ 148,000 Under the step method of cost allocation, the amount of costs allocated from S2 to P2 would be: Note: Do not round intermediate calculations. Multiple Choice $176,625. $89,500. $92,750. $102,000.
Octogon, Inc. has three operating departments: Cutting, Assembling, and Finishing. The data below are provided for the current year: Assembling Dept # workers 4,000 Cutting Dept Finishing Dept 5,000 1,000 Square ft occupied 15,000 sq ft 12,000 sq ft 23,000 sq ft Total Maintenance costs of $220,000 are allocated to each department based on the number of square feet. Determine the Maintenance costs to be allocated to each department. Check figure: Finishing Dept $101,200
Western Services has three service departments: Information Systems (IS), Personnel, and Administration. There are two operating departments: Residential and Commercial. A summary of costs and other data for each department prior to allocation of service department costs for the latest period follows: Department Information Systems (IS) Personnel Administration IS 170 115 3,900 Number of IS service tickets Number of employees Square footage occupied The costs of the service departments and the allocation basis for each department follow. Direct Cost $ 33,000 40,000 36,700 Personnel 200 120 8,000 Administration Residential Commercial 155 1,410 107 138 3,800 16,100 Allocation Base IS service tickets Employees Square footage occupied. 940 162 69,500 Required: a. Assume that the company allocates service department costs to production departments using the direct method. What amount of Information Systems (IS) Department costs will be allocated to the Commercial Department? b. Assume the…
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 $ 140, 600 98, 200 42,000 78,400 Required Required A B From: Required: Use the step method to allocate the service costs, using the following: Service department costs Quality control Repair Total costs allocated Proportion of Services Used by Quality Repair Control FabricatingFinishing a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). 0 0.3 Complete this question by entering your answers in the tabs below. Quality Control 0.3 0 Use the step method to allocate the service costs, using the following: The allocations are made in the reverse order (starting with Quality…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

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

SEE MORE TEXTBOOKS