tal buRequirements1. Allocate the two support departments' costs to the two operating departmentsusing the following methods:a. Direct methodb. Step-down method (Allocate AS first)C. Step-down method (Allocate IS first)2. Compare and explain differences in the support-department costs allocated toeach operating department.3. What approaches might be used to decide the sequence in which to allocatesupport departments when using the step-down method?Data table12Budgeted overhead costs before any3 interdepartment cost allocationsSupport work supplied by AS(budgeted head count)4Support work supplied by IS5 (budgeted computer time)BASSUPPORT0IS10%25%X0Dhas two supportgovernment consulting (GOVT) andGOVTirect method. (Do not round intermediany zero balances.)tmentsCORPOPERATING$ 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,00040%CORP30%Total35%F60%Total-100%100% Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two supportdepartments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020,Phoenix's cost records indicate the following:(Click the icon to view the cost records.)Read the requirements.Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest wholedollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.)Operating DepartmentsSupport DepartmentsASGOVTCORPDirect MethodBudgeted overhead costsbefore interdepartment cost allocationsAllocation of AS costsAllocation of IS costsTotal budgeted overhead of operating departments………….ISTotal

1. Direct Distribution Method Service Department Costs are allocated over the production…

Data table 1 2 A 3 S Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 4 (budgeted head count) Support work supplied by IS (budgeted computer time) 5 B SUPPORT AS C 10% IS 25% D 0 OPERATING GOVT 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,000 이 40% E 30% CORP 35% F LL 60% Total 100% 100%

Data table 1 2 A 3 S Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS 4 (budgeted head count) Support work supplied by IS (budgeted computer time) 5 B SUPPORT AS C 10% IS 25% D 0 OPERATING GOVT 600,000 $2,400,000 $8,756,000 $ 12,452,000 $ 24,208,000 이 40% E 30% CORP 35% F LL 60% Total 100% 100%

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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Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments administrative services (AS) and information systems (IS) and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2020, Phoenix's cost records indicate the following: (Click the icon to view the cost records.) Read the requirements. Requirement 1c. Allocate the two support departments' costs to the two operating departments using the step-down method (Allocate IS first). (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Support Departments AS Operating Departments CORP Step-down Method IS GOVT Total Budgeted overhead costs 690,000 $2,100,000 $8,675,000 $12,490,000 $23,955,000 before interdepartment cost allocations Allocation of IS…
Atlanta Partners provides management consulting services to government and corporate clients. Atlanta has two support departments—administrative services (AS) and information systems (IS)—and two operating departments—government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Atlanta's cost records indicate the following: Read the requirements2. Requirement 1a. Allocate the two support departments' costs to the two operating departments using the direct method. (Do not round intermediary calculations and round your final answers to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs. Enter a "0" for any zero balances.) Support Departments Operating Departments Direct Method AS IS GOVT CORP Total Budgeted overhead costs before interdepartment cost allocations Allocation of AS costs…
Martini Hotel & Casino is situated on beautiful Lake Tahoe in Nevada. The complex includes a 300-room hotel, a casino, and a restaurant. As Martini's new controller, your manager asks you to recommend the basis the hotel should use for allocating fixed overhead costs to the three divisions in 2020. You are presented with the following income statement information for 2019: (Click the icon to view the data.) Requirement 1. Calculate division margins in percentage terms prior to allocating fixed overhead costs. (Round your answers to two decimal places, X.XX.) Restaurant Casino Hotel 42.69 % Allocated fixed overhead costs Operating margin Operating margin % Data table Revenues Direct costs Segment margin Division margin Requirement 2. Allocate indirect costs to the three divisions using each of the three allocation bases suggested. For each allocation base, calculate division operating margins after allocations, in dollars and as a percentage of revenues Allocate the indirect costs, then…
Houstin Partners provides management consulting services to government and corporate clients. Houstin has two support departments-administrative services (AS) and information systems (IS)-and two operating departments-government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Houstin's cost records indicate the following: E (Click the icon to view the cost records.) Read the requirements. ..... intermediary calculations and round your final answers balances.) Data table SUPPORT OPERATING AS IS GOVT CORP Total Budgeted overhead costs before any interdepartment cost allocations Support work supplied by AS (budgeted head count) Support work supplied by IS (budgeted computer time) $ 390,000 $ 2,100,000 $ 7,500,000 $ 12,420,000 $ 22,410,000 25% 45% 30% 100% 10% 36% 54% 100% Requirements Print Done 1. Allocate the two support departments' costs to the two operating departments using the following methods: а. Direct method b. Step-down method (Allocate AS…
Carica Company is a manufacturer with two production departments (Machining andAssembly) as well as two support departments (Materials Requisitions and Utility Services).For the last quarter of 2020, Carica’s cost records indicate the following: Required:1. Allocate the two support departments’ costs to the two operating departments using thefollowing methods: a. Direct method b. Step-down method (allocate MR first) c. Step-down method (allocate US first) d. The Algebraic method. 2. Compare and explain differences in the support-department costs allocated to eachproduction department. 3. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?
Carica Company is a manufacturer with two production departments (Machining andAssembly) as well as two support departments (Materials Requisitions and Utility Services).For the last quarter of 2020, Carica’s cost records indicate the following: Required: 1. Compare and explain differences in the support-department costs allocated to eachproduction department. 2. What approaches might be used to decide the sequence in which to allocate supportdepartments when using the step-down method?
Carica Company is a manufacturer with two production departments (Machining andAssembly) as well as two support departments (Materials Requisitions and Utility Services).For the last quarter of 2020, Carica’s cost records indicate the following: Required:1. Allocate the two support departments’ costs to the two operating departments using thefollowing methods:a. Direct method b. Step-down method (allocate MR first) c. Step-down method (allocate US first) d. The Algebraic method.
Support-department cost allocation; direct and step-down methods. Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments—administrative services (AS) and information systems (IS)—and two operating departments— government consulting (GOVT) and corporate consulting (CORP). For the rst quarter of 2017, Phoenix’s cost records indicate the following:
A new set of financial managers are hired to Holland Company, a manufacturing-concern entity that produces Product A. The financial managers are now planning the operations for 2022. They are currently doing the sales and production budget of the entity. Upon inspecting the financial records of the entity, they found at that each unit of Product A utilizes three kinds of materials – Material X, Material Y, and Material Z. To produce each unit of Product A, three units of Material X, 2 units of Material Y, and 4 units of Material Z are needed. It also needs 2.5 direct labor hours to manufacture each unit. Factory overhead is applied at 50% of direct labor costs. As the usual practice, the entity is preparing the budget on a quarterly basis. For the 4th quarter of 2021, the entity was able to sell 120000 units of Product A at an average price of P400 per unit. Because the new set of financial managers are confident that the company can do more, they are targeting to increase units sold…
Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Costs Personnel Legal Complete this question by entering your answers in the tabs below. Total Personnel $ Personnel $ 10,800 $ 320,000 Required: a. Allocate the cost of the service departments to the operating divisions using the direct method. b. Allocate the cost of the service departments to the operating divisions using the step method. Start with Legal. c. Allocate the cost of the service departments to the operating divisions using the reciprocal method. 320,000 $ 320,000 $ Required A Required B Required C Allocate the cost of the service departments to the operating divisions using the reciprocal method. Note: Do not round intermediate calculations. Round your final answers…
Peters Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2024, managing partner Jane Peters prepared the following budget for the year: (Click the icon to view the prepared budget.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Compute Peters Realtors' (a) hourly direct labor cost rate and (b) predetermined overhead allocation rate. Begin with (a) hourly direct labor cost rate. Direct labor cost rate per hour Data table Direct labor hours (professionals) Direct labor costs (professionals) Office rent Support staff salaries Utilities Print $ Done 12,750 hours 2,550,000 380,000 1,397,500 390,000 X
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing.and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT tickets Employees Department direct costs From: Service department costs IT HR Total $ IT IT 0 20 $ 156,800 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. 39,200 39,200 0x HR 1,585 0 $ 249,030 Answer is not complete. $ Cost Allocation To: HR Publishing 2,536 30 $ 433,400 0 0X 0 Publishing $ 0x 74,709 x 74,709 Binding 2,219 50 $ 398,500 $ Binding 0 x 124,515 124,515