Booker Company operates a factory with two departments, X and Y. The rent paid on the manufacturing facility would most likely be allocated to departments X and Y on the basis of: direct labor hours. machine hours. square footage occupied. units sold

Booker Company operates a factory with two departments, X and Y. The rent paid on the manufacturing facility would most likely be allocated to departments X and Y on the basis of: direct labor hours. machine hours. square footage occupied. units sold

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Carter, Incorporated, produces two products, Product A and Product B. Carter uses a traditional volume-based costing system in which direct labor hours are the allocation base. Carter is considering switching to an ABC system by splitting its manufacturing overhead cost across three activities: Design, Production, and Inspection. The cost of each activity and usage of the cost drivers are as follows: Activity Pool (Driver) Design (engineering hours) Production (direct labor hours) Inspection (batches) Cost of Pool $ 300,000 500,000 200,000 300,000 100 Carter manufactures 10,000 units of Product A and 7,500 units of Product B per month. Required: a. Calculate the predetermined overhead rate under the traditional costing system. b. Calculate the activity rate for Design. c. Calculate the activity rate for Machining. d. Calculate the activity rate for Inspection. e. Calculate the indirect manufacturing costs assigned to each unit of Product A under the traditional costing system. f.…
In Al-Waha Water Bottling Company, costs of setting up factory machinery for a new production run would be classified as a. Organization - sustaining level activity b. Unit level activity c .none of the given answers d. Product-sustaining level activity e. Batch level activity
AI Rawabi company consist of two support departments (Administration and R& D) and two operating departments (Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cost of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the support departments to the operating departments using direct step-dowrtHow much is the Assembling department total cost after cost allocation: Support Departments Operating Departments Admin R&D Manufacturing Assembling Total Cost Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13 Select one: O a. RO 155775 O b. 162090.3 O c. RO 143225 O d. RO 136909.7
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. Marley's ManufacturingIncome StatementMonth Ending August 31, 2018 Dept. A Dept. B Sales $23,000 $50,000 Cost of goods sold 11,270 25,500 Gross profit $11,730 $24,500 Expenses: Utility expenses $1,380 $3,000 Wages expense 5,520 10,000 Costs allocated from corporate 2,070 14,000 Total expenses $8,970 $27,000 Operating income/(loss) in dollars $fill in the blank 1 $fill in the blank 2 Operating income/(loss) in percentage fill in the blank 3 % fill in the blank 4 %
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Alpha Company has three support departments whose direct department costs are P20,000, P30,000, and P40,000, respectively, and two producing departments whose direct department costs are P400,000 and P360,000, respectively. The combined total department cost for the producing departments after allocation of the support departments is?
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Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense $ 125,000 Indirect labor $ 5,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.40 0.40 0.20 Indirect labor 0.40 0.40 0.20 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs (Processing) Batches (Supervising) Product F6 16,400 910 Product X0 1,490 1,350 Total 17,890 2,260 What is…
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A Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $12,100; Order Filling, $16,800; and Other, $13,500. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:ICO/4243 0 MHS (Machining) 5,800 4,200 Product P17 Product V29 Q. What is the overhead cost assigned to Product P17 under activity-based costing? Answer. (Click to select) (Click to select) None of the answers are correct. $10,122 $12,058 $16,842 $18,778 Orders (Order Filling) 300 700
Sutton Construction Inc is a privately held, family founded corporation on that builds single and multiple - unit housing. Most projects sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a job order costing system for determining the cost of each unit. The costing system is fully computerized. Each project's costs are divided into following five categories: 1. General conditions, including construction site utilities, project insurance permits and licenses, architect fees, decorating, field office salaries, and clean up costs 2. Hard costs, such as subcontractors, direct materials and direct labor 3. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages 4. Land costs, which refer to the purchases price of the construction site 5. Marketing costs, such as advertising, sales commisions, and appraisal fees Recently, sutton corporation purchased land for the purposes of developing 20…
The cost accountant for M. Company wants to determine the cost of factory overhead. Based on observation and discussions with plant workers, you feel that five accounts are most relevant. Two are fixed- supervisory salaries and depreciation- and the remaining three are variable. Indirect labor is primarily used to move materials and varies with a number of moves. The largest component of utilities is electricity to run production machinery; which is driven by machine hours. Purchasing seems to be driven by the number of purchase orders. The accounts and their balances for the past six months are shown below: Indirect Plant and Labor Supervisory Equipment Cost Utilities Purchasing Salaries Depreciation July $14,250 $12,000 $38,200 $20,000 $6,500 Aug 15,800 10,600 35,400 23,000…