FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- A company has a Trucking Services Department that provides transportation to haul a rare mineral from the company's mine to its two mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department consists of $0.32 per ton variable cost and $355,000 of fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 70% of the Trucking Services Department's capacity and the Southern Plant requires 30%. During the year, the Trucking Services Department actually hauled 120,000 tons of mineral to the Northern Plant and 60,000 tons to the Southern Plant. The Trucking Services Department incurred $384,000 in cost during the year, of which $54,000 was variable cost and $330,000 was fixed cost. How much of the Trucking Services Department's variable costs should be charged to the Northern plant? O $36,000 O $38,400 O $57,600 O None of the listed answers O $28,800 How much of the Trucking…arrow_forwardGodoarrow_forwardJamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 1,700 feet General administration 3,700 feet Producing Department A 8,700 feet Producing Department B 8,700 feet 22,800 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $45,000, the amount of cost allocated to General Administration under the direct method would be: Multiple Choice $7,400. $9,432. $7,303. $0.arrow_forward
- T-Shirt Co. makes two products: A and B. In the cutting department, budgeted information is as follows: Budgeted manufacturing overhead: $400,000 Budgeted machine hours: 80,000 Budgeted units produced: 50,000 The company allocates overhead based on units produced. The actual number of machine hours spent on product B is 30,000 and 10,000 units of product B are produced. How much is the manufacturing overhead of product B in the cutting department? 80,000 230,000 320,000 150,000arrow_forwardHannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $321,300 per year, consisting of $0.15 per ton variable cost and $271,300 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 69% of the Transport Services Department's capacity and the Southern Plant requires 31%. During the year, the Transport Services Department actually hauled 124,000 tons of ore to the Northern Plant and 58,600 tons to the Southern Plant. The Transport Services Department incurred $361,000 in cost during the year, of which $54,000 was variable cost and $307,000 was fixed cost. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport Services Department's fixed costs…arrow_forwardSolomons, Inc. has refined its allocation system by separating manufacturing overhead into two cost pools, one for each department. The estimated cost for the mixing department, $615,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 201,000. The estimated cost for the packaging department, $293,000, will be allocated based on direct labor hours, and the estimated machine hours for the year are 59,200. In October, the company incurred 17,240 direct labor hours in the mixing department and a total of 14,260 machine hours in the packaging department.(Round your answers to two decimal places when needed and use rounded answers for all future calculations).1. Compute the predetermined overhead allocation rates. Department Total estimated overhead cost ? Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate (Per Machine Hour) Mixing Department = Packaging Department =…arrow_forward
- Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows: Custodial services 2,700 feet General administration 4,700 feet Producing Department A 9,700 feet Producing Department B 9,700 feet 26,800 feet The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $55,000, the amount of cost allocated to General Administration under the direct method would be:arrow_forwardHannibal Steel Company's Transport Services Department provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $283,800 per year, consisting of $0.17 per ton variable cost and $233,800 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 58% of the Transport Services Department's capacity and the Southern Plant requires 42%. During the year, the Transport Services Department actually hauled 127,000 tons of ore to the Northern Plant and 61,200 tons to the Southern Plant. The Transport Services Department incurred $356,000 in cost during the year, of which $53,200 was variable and $302,800 was fixed. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport Services Department's fixed costs should be charged to…arrow_forwardPatel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 51,600 machine hours per year, which represents 25,800 units of output. Annual budgeted fixed factory overhead costs are $258,000 and the budgeted variable factory overhead cost rate is $2.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 19,500 units, which took 40,600 machine hours. Actual fixed factory overhead costs for the year amounted to $251,600 while the actual variable overhead cost per unit was $2.40. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…arrow_forward
- Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $390,000 are allocated on the basis of budgeted warehouse - hours. Data Center Department costs of $100,000 are allocated based on the number of computer log - on hours. The costs of operating departments Music and Books are $122,500 and $147,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Production Departments Warehouse Data Center Music Books Department $390,000 Department $100,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $122,500 $147.000 NA 580 1,040 1,600 220 NA 810 1,010 Dr Using the step - down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round intermediary calculations to three decimal places.) O A.…arrow_forwardMackenzie Mining has two operating divisions, Northern and Southern, that share the common costs of the company's human resources (HR) department. The annual costs of the HR department total $14,000,000 a year. You have the following selected information about the two divisions: Northern Southern Required: a. What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? b. What is the HR cost that is charged to each division if the wage and salary expense total is used as the allocation basis? Required A Number of Wage and Salary Expense ($000) $ 173,600 106,400 Complete this question by entering your answers in the tabs below. Employees 2,310 1,890 Division Northern Southern What is the HR cost that is charged to each division if the number of employees is used as the allocation basis? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Required B HR Cost Required A Required B >…arrow_forwardThe Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 68% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $261,000 Take Off Airlines 85,000 Sleepy Tired Hotels 208,300 Tastee Beverages 122,300 Total $676,600 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $187,000 $717,100 Take Off…arrow_forward
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