Casas Corporation has two service departments, Personnel and Cafeteria, and two operating departments, Customer Care and Customer Solutions. The number of employees in each department are: Personnel 20 Cafeteria 30 Customer Care 305 Customer Solutions 290 Total 645 The fixed costs of the Personnel Department are allocated on the basis of the number of employees. If these costs are budgeted at $46,250, the amount of Personnel Department cost allocated to the Cafeteria under the step-down method would be closest to:

Casas Corporation has two service departments, Personnel and Cafeteria, and two operating departments, Customer Care and Customer Solutions. The number of employees in each department are: Personnel 20 Cafeteria 30 Customer Care 305 Customer Solutions 290 Total 645 The fixed costs of the Personnel Department are allocated on the basis of the number of employees. If these costs are budgeted at $46,250, the amount of Personnel Department cost allocated to the Cafeteria under the step-down method would be closest to:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
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Your Companey has two service departments – Personnel and Maintenance. The Maintenance Department's costs of $160,000 are allocated on the basis of standard hours used. The Personnel Department's costs of $40,000 are allocated based on the number of employees. The costs of the operating Departments A and B are $80,000 and $120,000, respectively. Data on standard service hours and number of employees are as follows: Standard Service Maintenance Dept. Personnel Dept. Production Depts. A B Hours used - 400 480 320 Number of Employees 20 - 80 240 What is the cost of the Maintenance Department allocated to Department B using the direct method? What is the cost of the…
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Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following annual budgeted information (presented in a benefits-provided ranking) is available: Personnel Administration Residential Commercial Direct costs $196,000 $252,000 $672,000 $1,120,000 Number of employess 17 42 101 67 Direct labor hours 84,000 126,000 Square feet cleaned 630,000 798,000 a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Total support costs allocated to Residential = $ Total support costs allocated to Commercial = $ b. Using the step method, allocate the costs of Personnel and…