Using ABC in a service companyBlanchette Plant Service completed a special landscaping job for Kerry Company. Blanchette uses ABC and has the following predetermined overhead allocation rates:The Kerry job included $750 in plants; $1,300 in direct labor; one design; and 30 plants.RequirementsWhat is the total cost of the Kerry job?If Kerry paid $3,540 for the job, what is the operating income or loss?If Blanchette desires an operating income of 30% of cost, how much should the company charge for the Kerry job? PredeterminedOverhead Allocation Rate$ 290 per design$ 20 per plantActivityAllocation BaseDesigning Number of designsNumber of plantsPlanting

Name: Using ABC in a service companyBlanchette Plant Service completed a spe
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Description: Using ABC in a service companyBlanchette Plant Service completed a special landscaping job for Kerry Company. Blanchette uses ABC and has the following predetermined overhead allocation rates:The Kerry job included $750 in plants; $1,300 in direct la

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Predetermined Overhead Allocation Rate $ 290 per design $ 20 per plant Activity Allocation Base Designing Number of designs Number of plants Planting

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 7P: Distribution of service department costs to production departments using the sequential distribution...

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Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Expected Consumption Activity 7. Inserting dies 8. Purchasing materials 1. Developing test programs 3. Testing products ABC assignments Total overhead cost Required: Driver Number of dies Number of purchase orders Engineering hours Test hours Wafer A Wafer B Quantity 1,900,000 X والے 1,900 9,000 19,000 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2. Wafer A 0.7 0.2 Ratios 0.25 0.6 $165,000 1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool Purchasing cost pool Wafer B 0.3 2. As the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar. 0.8 0.75 0.4 $165,000 $330,000
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