estmore Company has two service departments and two operating departments. Budgeted costs and other data relating to these departments are presented below: Building & grounds Personnel Operating dept A Operating dept B Departmental costs R54 000 R200 000 R650 000 R800 000 Square meters occupied 1 000 3 000 12 000 15 000 Number of employees 10 5 45 55 Direct labour hours 76 000 92 000 The costs of Building & Grounds are allocated first on the basis of square meters of space occupied. Personnel costs are allocated on the basis of number of employees. The departmental costs for the operating departments are overhead costs. Predetermined overhead rates in the operating departments are computed on the basis of direct labour-hours. Assume that the company uses the step method. The total amount of cost allocated from the two service departments to the operating departments for the year would be:

estmore Company has two service departments and two operating departments. Budgeted costs and other data relating to these departments are presented below: Building & grounds Personnel Operating dept A Operating dept B Departmental costs R54 000 R200 000 R650 000 R800 000 Square meters occupied 1 000 3 000 12 000 15 000 Number of employees 10 5 45 55 Direct labour hours 76 000 92 000 The costs of Building & Grounds are allocated first on the basis of square meters of space occupied. Personnel costs are allocated on the basis of number of employees. The departmental costs for the operating departments are overhead costs. Predetermined overhead rates in the operating departments are computed on the basis of direct labour-hours. Assume that the company uses the step method. The total amount of cost allocated from the two service departments to the operating departments for the year would be:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 6E: Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing...

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Blue-Pool Company is an electric utility which has two service departments, Accounting and Maintenance. It also has two operating departments, Generation and Transmission. Maintenance Department costs are allocated based on maintenance hours of service. Accounting Department costs are allocated based on accounting hours of service provided. Budgeting costs and other data for the following year are as follows: Accounting Maintenance Generation Transmission Budgeted costs R100 000 R200 000 R600 000 R400 000 Maintenance hours of service 600 7 200 4 800 Accounting hours of service 500 2 000 4 500 3 500 The step method is used to allocate service department costs, with the accounting department being allocated first. Calculate the amount of accounting department costs that needs to be allocated to the generation department. A. R42 860 B. R38 000 C. R57 143 D. R45…
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Budgeted Cost Activity Cost Driver Product A Product B Product C $ 70,000 $ 45,000 $ 82,000 Square feet Units inspected Activity 1 6,000 9,000 20,000 Activity 2 Activity 3 7,000 15,000 8,000 Setups 2,500 1,000 1,625 What are the activity rates for the three activities under activity-based costing? Multiple Choice (1) $2.00 per square foot; (2) $3.00 per unit; (3) $3.50 per setup. (1) $3.50 per square foot; (2) $1.50 per unit; (3) $32,80 per setup. (1) $3.50 per square foot; (2) $3.00 per unit; (3) $16.00 per setup. (1) $2.00 per square foot: (2) $1.50 per unit; (3) $16.00 per setup.
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bartleby, a Learneo, Inc. business

	Building & grounds	Personnel	Operating dept A	Operating dept B
Departmental costs	R54 000	R200 000	R650 000	R800 000
Square meters occupied	1 000	3 000	12 000	15 000
Number of employees	10	5	45	55
Direct labour hours			76 000	92 000

	A.	R850 000.
	B.	R254 000.
	C.	R1 704 000.
	D.	R1 450 000.