hrl.3 Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.SupplyingDepartmentEngineeringAdministrationMaintenanceDirect costUsing DepartmentEngineering Administration Maintenance Fabrication50%-3733]020%$25,000EngineeringAdministrationMaintenanceTotal010%0$28,000Costs$ 55,760$217,600Allocated to:Fabrication$Assembly0 $020%0010%Required:Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediatecalculations.)50%20%$195,000Assembly40%20%60%$50,000

Name: hrl.3 Midland Resources has two production departments (Fabrication an
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Description: hrl.3 Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering,Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.Supplyin

OverheadIn cost accounting, overhead refers to those expenses which occur during the operating of a…

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Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance Direct cost Engineering Administration Maintenance Engineering 0 10% 0 $28,000 Total Costs Using Department Administration Maintenance Fabrication $ 55,760 50% 0 20% $217,600 $ Allocated to: Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 0 20% 0 $25,000 Assembly 0 $ 10% 50% 20% 0 $195,000 Assembly 40% 20% 60% $50,000

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance Direct cost Engineering Administration Maintenance Engineering 0 10% 0 $28,000 Total Costs Using Department Administration Maintenance Fabrication $ 55,760 50% 0 20% $217,600 $ Allocated to: Fabrication Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) 0 20% 0 $25,000 Assembly 0 $ 10% 50% 20% 0 $195,000 Assembly 40% 20% 60% $50,000

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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Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance Direct cost Engineering Administration Maintenance Using Department Engineering Administration Maintenance Fabrication Total 0 10% 0 $30,000 50% 0 30% Costs $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Assembly 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000
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