Dickson Company has two production departments and two support departments. Each department occupies the following square footage: Housekeeping Services 1,500 Administration 2,500 Accounting Department - Producing 5,000 Tax Department - Producing 5,000 Support department costs are allocated on the basis of the square footage of space. If the administration costs are $67,000 and housekeeping costs are $45,000, what amount would be allocated to the accounting department if the company uses the step method?

Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400

Vargas, Inc., produces industrial machinery. Vargas has a machining department and a group of direct laborers called machinists. Each machinist is paid 25,000 and can machine up to 500 units per year. Vargas also hires supervisors to develop machine specification plans and to oversee production within the machining department. Given the planning and supervisory work, a supervisor can oversee three machinists, at most. Vargass accounting and production history reveal the following relationships between units produced and the costs of direct labor and supervision (measured on an annual basis): Required: 1. Prepare two graphs: one that illustrates the relationship between direct labor cost and units produced, and one that illustrates the relationship between the cost of supervision and units produced. Let cost be the vertical axis and units produced the horizontal axis. 2. How would you classify each cost? Why? 3. Suppose that the normal range of activity is between 2,400 and 2,450 units and that the exact number of machinists is currently hired to support this level of activity. Further suppose that production for the next year is expected to increase by an additional 400 units. How much will the cost of direct labor increase (and how will this increase be realized)? Cost of supervision?

Blue Africa Inc. produces laptops and desktop computers. The companys production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the companys production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is 273,000. The total cost of the Cafeteria Department is 180,000. The number of employees and the square footage in each department are as follows: Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 210 employees and occupies 63,600 square feet; Painting has 90 employees and occupies 42,400 square feet. The company has indirect expenses that consist of administrative expenses of $93,000 and maintenance expenses of $117,000. Administrative expenses are allocated based on the number of workers in each department and maintenance is allocated based on square footage. The amount of administration expenses that should be allocated to the Assembly Department for the current period is:

Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 210 employees and occupies 56,400 square feet; Painting has 140 employees and occupies 37,600 square feet. The company has indirect expenses that consist of administrative expenses of $87,000 and maintenance expenses of $105,000. Administrative expenses are allocated based on the number of workers in each department and maintenance is allocated based on square footage. The amount of maintenance expenses that should be allocated to the Assembly Department for the current period is: Multiple Choice O $52,200. O $63,000. O $115,200. O $115,950. O $126,000.

Kia Corporation has two departments, A and B. Central costs could be allocated to the two departments in various ways. Square footage of department A and B 6,000 and 18,000 square feet respectively, Number of employees of department A and B 1,500 and 500 respectively, and sales of department A and B $400,000 and $2,000,000 respectively. If total processing costs of $96,000 are allocated on the basis of number of employees, the amount allocated to Department B would be: a. $24,000 b. $28,800 c. $16,000 d. $67,200

Flamingos, Incorporated has two service departments and two operating (production) departments. Administrative Department costs are allocated to the Assembly and Packaging departments based on the number of employees, and Maintenance Department costs are allocated to the Assembly and Packaging departments based on square feet occupied. Data for these departments follows: Department Direct Expenses Number Employees Square Feet Administrative $42,000 Maintenance 27,000 Assembly 82,000 Packaging 57,000 4 The total amount of service department costs (Administrative and Maintenance) that would be allocated to the Packaging Department is: O $33,000. $48,600. $33,600. $16,800. $16,200. 6 1,600 2,400

Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet occupied. Listed below are the operating data for the current period: Department Direct Expenses Square FeetMaintenance $ 25,500 Milling 76,500 10,000 Assembly 105,400 15,000 The total cost of operating the Assembly Department for the current period is?

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…