Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way, they can always be together, even when they're apart. To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and costs are adjusted to manage the margins for next year. Here is the information he has gathered: Total support department costs: HR, $95,200; Legal, $108,640. Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000. HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively. (a) Determine the total costs in the operating departments after allocating support costs using the direct method. (Round intermediate calculations to 4 decimal places, e.g. 15.2564 and final answers to O decimal places, e.g. 5,125.) Totals $ Save for Later Operating Segments Animals Dolls $ Total costs Attempts: 0 of 1 used Submit Answer

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 1CE: Ventana Window and Wall Treatments Company provides draperies, shades, and various window...
Question
Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way,
they can always be together, even when they're apart.
To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support
department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for
profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and
costs are adjusted to manage the margins for next year. Here is the information he has gathered:
Total support department costs: HR, $95,200; Legal, $108,640.
Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000.
HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also
provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively.
(a)
Determine the total costs in the operating departments after allocating support costs using the direct method. (Round
intermediate calculations to 4 decimal places, e.g. 15.2564 and final answers to O decimal places, e.g. 5,125.)
Totals
$
Save for Later
Operating Segments
Animals
Dolls
$
Total costs
Attempts: 0 of 1 used Submit Answer
Transcribed Image Text:Beckett works for Bramble Inc., which produces stuffed animals and dolls in the likeness of customers' pets or loved ones. This way, they can always be together, even when they're apart. To make sure the full cost of making and selling these products is correctly determined, Beckett must carefully assign the support department costs to the operating departments. At the end of the year, these costs are compared to revenues from each segment for profitability analysis. If product categories did not generate as much profit margin as management had hoped, then selling prices and costs are adjusted to manage the margins for next year. Here is the information he has gathered: Total support department costs: HR, $95,200; Legal, $108,640. Total costs in the Animals segment are $652,000, while total costs in the Dolls segment are $519,000. HR provides support to Legal, in addition to the Animals and Dolls segments: 20%, 35%, and 45%, respectively. Legal also provides support to HR and to the Animals and Dolls segments: 30%, 20%, and 50%, respectively. (a) Determine the total costs in the operating departments after allocating support costs using the direct method. (Round intermediate calculations to 4 decimal places, e.g. 15.2564 and final answers to O decimal places, e.g. 5,125.) Totals $ Save for Later Operating Segments Animals Dolls $ Total costs Attempts: 0 of 1 used Submit Answer
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