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:           Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Machining Assembly Machining $ 140,000                   Assembly   71,000                   Maintenance   51,000   —   0.2   0.6   0.2   Cafeteria   36,000   0.6   —   0.2   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).

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Maxwell paid cash of $2,700,000 for this investment which gave them significant influence over Magic.  The following book values and fair values for Magic on that date are available:                                                                           Book Value                 Fair Value                         Cash and Receivables             $   110,000                  $   110,000                         Equipment                                5,000,000                    5,700,000                         Patents                                         100,000                    4,000,000                         Trademark                                   150,000                    2,000,000                         Liabilities                                   (185,000)                   (185,000)               The remaining useful life for these assets are:               Equipment   7 years                Patents   3 years                Trademark  indefinite…

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: Proportion of Services Used by Department Fabricating Direct Costs Repair $ 134,600 Quality Control Fabricating Finishing Finishing 98,200 Repair Quality Control 42,000 78,400 0 0.2 0.5 0.3 0.6 0 0.2 0.2 Required: Use the step method to allocate the service costs, using the following: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Complete this question by entering your answers in the tabs below. 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 deducted should be indicated by a minus sign. Do…

Activity-Based Costing: Factory Overhead Costs NOORGOGUO The total factory overhead for Bardot Marine Company is budgeted for the year at $1,205,100, divided into four activities: fabrication, $528,000; assembly, $192,000; setup, $262,350; and inspection, $222,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication 8,250 dih 24,750 33,000 dih Assembly 24,000 dih 8,000 32,000 din 495 setups Each product is budgeted for 6,000 units of production for the year. a. Determine the activity rates for each activity. Fabrication per direct labor hour Assembly per direct labor hour Setup per setup. Inspection per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat Bass boat Speedboat Bass boat per unit per unit Setup 59 setups 436 Inspection 103 inspections 722 825 inspections

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:   IS Personnel Administration Residential Commercial Number of IS service tickets 130 160 115 1,410 940 Number of employees 75 80 67 138 162 Square footage occupied 3,900 8,000 3,800 16,100 69,500 The costs of the service departments and the allocation basis for each department follow. Department Direct Cost Allocation Base Information Systems (IS) $ 25,000 IS service tickets Personnel 32,000 Employees Administration 28,700 Square footage occupied Required: 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…

Linger Products uses a two-stage allocation method to assign costs to its products. The following information has been provided for March:    Product 1 Product 2 Total Units   3,000     2,000     5,000   Machine hours   2,000     4,000     6,000   Direct labor hours   2,000     2,000     4,000   Direct materials $ 60,000   $ 60,000   $ 120,000   Direct labor   45,000     45,000     90,000   Manufacturing overhead                   Utilities (machine related)             $ 3,000   Supplies (labor related)               8,000   Training (labor related)               20,000   Supervision (labor related)               17,000   Machine depreciation (machine related)               24,000   Lease on factory (machine related)               33,000   Miscellaneous (labor related)               5,000   Total manufacturing overhead             $ 110,000     Required:(a) Allocate the manufacturing overhead to two cost pools: machine-related and labor-related.(b)…

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