Martin and Beasley, an accounting firm, provides consulting and tax planning services. A recent analysis found that 55% of the firm's billable hours to clients resulted from tax planning and for many years, the firm's total administrative cost (currently $270,000) has been allocated to services on this basis. The firm, contemplating a change to activity-based costing, has identified three components of administrative cost, as follows: Staff support $200,000 In-House Computing Charges $50,000 Misc. Office Cost 20,000 Total Cost: 270,000 A recent analysis of staff support found a strong correlation with the number of clients served. In contrast, in-house computing and miscellaneous office cost varied directly with the number of computer hours logged and number of client transactions, respectively. Consulting clients served totaled 35% of the total client base, consumed 30% of the firm's computer hours, and accounted for 20% of the total client transactions. If Martin and Beasley switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would: A. decrease by $32,500. B. increase by $32,500. C. decrease by $59,500. D. change by an amount other than those listed above. E. change, but the amount cannot be determined based on the information presented.

The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. Additional data for the two divisions is following below: Retail Division Commercial Division Sales $2,150,000 $1,200,000 Cost of goods sold 1,300,000 800,000 Selling expenses 150,000 175,000 Determine the divisional income from operations for the Retail Division and the Commercial Division. Do not round interim calculations. Hardy Company Divisional Income from Operations blank Retail Division Commercial Division $- Select - $- Select - - Select - - Select - $- Select - $- Select - - Select - - Select - $- Select - $- Select - - Select - - Select - Income from operations $fill in the blank 19 $fill in the blank 20 Check My Work PreviousNext

Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income $ Total Company $900,000 100.0% 414,000 46.00 486,000 54.00 187,200 20.80 298,800 33.20 Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 43,500 117,000 13.00 $181,800 20.20% Toronto Vancouver $120,000 100% $780,000 100% 390,000 50 24,000 20 96,000 80 390,000 50 140,400 18 46,800 39 $ 49,200 41% $249,600 32% 2-a. Refer to…

During the coming accounting year, Baker Manufacturing, Inc., anticipates the following costs, expenses, and operating data: Direct material (16,000 lb.) $70,000 Direct labor (@ $20/hr.) $20,000 Factory administration $15,000 Indirect labor $10,000 Indirect material $14,000 Non factory administrative expenses $16,000 Other manufacturing overhead $15,000 Maintenance of factory machine $20,000 Sales commissions $70,000 Direct labor hours 2,000 Machine hours 8,000 Calculate the predetermined manufacturing overhead rate for the coming year using direct labor hour as the allocation base. Round your answer to two decimal places when applicable.

Naper Inc. manufactures power equipment. Naper has two primary products-generators and air compressors. The following report was prepared by the controller for Naper's senior marketing management for the year ended December 31: Generators Air Compressors Total $ 4,200,000 (2,940,000) $ 1,260,000 $ 3,000,000 $ 7,200,000 (5,040,000) $ 2,160,000 (610,000) $ 1,550,000 Revenue Cost of goods sold Gross profit Selling and administrative expenses Operating income (2,100,000) $ 900,000 The marketing management team was concerned that the selling and administrative expenses were not traced to the products. Marketing management believed that some products consumed larger amounts of selling and administrative expense than did other products. To verify this, the controller was asked to prepare a complete product profitability report, using activity-based costing. The controller determined that selling and administrative expenses consisted of two activities: sales order processing and post-sale…

The sports equipment division of Kevin Hall Company is operated as a profit centre. Sales for the division were budgeted for 2022 at $896,000. The only variable costs budgeted for the division were cost of goods sold ($442,000) and selling and administrative costs ($64,000). Fixed costs were budgeted at $102,000 for cost of goods sold, $92,000 for selling and administrative costs, and $75,000 for noncontrollable fixed costs. Actual results were as follows: Sales $864,000 Cost of goods sold Variable 416,000 Fixed 106,000 Selling and administrative costs Variable 65,000 Fixed 73,000 Noncontrollable fixed costs 91,000 Assume the division is an investment centre, and average operating assets were $1,000,000. What is ROI?

GrayCell is in their first year of operations. GrayCell budgeted $40,000 of fixed manufacturing overhead, which they allocated over an activity base of 1,000 units. They actually produced 974 units, actually incurred $44,154 in fixed manufacturing overhead, and actually sold 891 Calculate the difference between absorption and variable income for GrayCell.

Maira Corporation has set various goals and the management is taking various appropriate actions to ensure the company achieves these goals. One of the actions is to reduce operational costs, which exceeds budgeted amount. Which of the following functions best describes this process?   A. Decision-making B. Planning C. Directing operational activities D. Controlling   2. HOC Company's costs for the month of June 2021 were as follows: direct materials, RM25,000; direct labor, RM32,500; selling, RM16,000; administrative, RM15,500; and manufacturing overhead, RM44,400. The beginning work in process inventory was RM17,000 and the ending work in process inventory was RM7,000. What was the cost of goods manufactured for the month?   (a) RM105,000 (b) RM31,500 (c) RM133,400 (d) RM111,900   3. Chery Company manufactures and sells washing machines. In order to make assembly of the machines faster and easier, some of the metal parts in the machines are coated with grease. How should the cost of…

Sagar

The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up LastCall: LaidBack and StressedOut. LaidBack division manages the company’s traditional business line. This business, although lucrative, is currently not growing. StressedOut, on the other hand, is the company’s new business, which has experienced double-digit growth for each of the last three years. The cost allocation system at LastCall allocates all corporate costs to the divisions based on a variety of cost allocation bases. Personnel costs are allocated based on the average number of employees in the two divisions. There are two basic activities in the Personnel Department. The first, called employee maintenance, manages employee records. Virtually all of this activity occurs when employees are hired or leave the company. The other activity is payroll, which is an ongoing activity and requires the same amount of work for each employee regardless of the employee’s…