The following information relates to Osceola Corporation for the past accounting period.Service Department AService Department BProducing Department CProducing Department DProportion of service by A to:10%60%30%BUDCProportion of service by B to:30%20%50%RUDAсUsing the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rounded to the nearest whole dollar) is:Multiple Choice$76,800Direct costs$110,00070,60028,20028,600$81,142.$66,000.$116,000

The indirect Costs include the costs that are not related directly to the production. The various…

Service Department A Service Department B Producing Department C Producing Department D B C D Proportion of service by A to: 10% RCD A Proportion of service by B to: 30% 20% 50% Multiple Choice $76,800 $81,142. Direct costs 60% 30% sing the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rounded to the nearest whole dollar) is $66,000 $110,000 70,600 28,200 28,600 $116,000 for the past accounting period.

Service Department A Service Department B Producing Department C Producing Department D B C D Proportion of service by A to: 10% RCD A Proportion of service by B to: 30% 20% 50% Multiple Choice $76,800 $81,142. Direct costs 60% 30% sing the reciprocal (simultaneous solution) method, Department A's cost allocated to Department C (rounded to the nearest whole dollar) is $66,000 $110,000 70,600 28,200 28,600 $116,000 for the past accounting period.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Contribution margin per constraint Zion Metals Inc. has three grades of metal product, A1, B3, and E6. Financial data for the three grades are as follows: A1 B3 E6 Revenue $ 400,000 $ 578,000 $ 300,000 Variable cost $(250,000) $(380,000) $(270,000) Fixed cost (105,000) (118,800) (20,000) Total cost $(355,000) $(498,800) $(290,000) Operating income $ 45,000 $ 79,200 $ 10,000 Number of units ÷ 15,000 ÷ 16,500 ÷ 5,000 Operating income per unit $ 3.00 $ 4.80 $ 2.00 Zion Metals’ operations require all three grades to be melted in a furnace before being formed. The furnace runs 24 hours a day, 7 days a week, and is a production constraint. The furnace hours required per unit of each product are as follows: A1: 8 hours B3: 10 hours E6: 6 hours The Marketing Department is considering a new marketing and sales campaign. Which product should be emphasized in the marketing and sales…
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Transfer pricingMogi Corp. manufactures one primary product, which is processed through two divisions (P and R). Costs for each division are: P R Variable cost per gallon $3 $15 Fixed cost per gallon* 2 12 * Based on production of 75,000 and 120,000 gallons for P and R respectively. P Division produces 75,000 gallons per month. R Division uses 120,000 gallons per month; of that, 75,000 gallons are purchased internally and 45,000 are purchased externally at $10 per gallon. After processing through R Division, a gallon of final product can be sold for $55.a. What would be P’s transfer price to R Division if the price is set at 180 percent of variable cost? $Answer b. What would be P’s transfer price to R Division if the price is set at 130 percent of full cost? $Answer c. What would be P’s transfer price to R Division if the price is set at market value? $Answer d. What is Mogi Corp.’s operating profit if all 120,000 gallon of final product can be sold for $55 per…
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Part 2 – CVP Analysis The condensed income statement of the Happy Valley Inn is as follows" Variable Costs $1,800,000 1,250,000 200,000 $3,250,000 Fixed Costs Department Income $3,300,000 200,000 150,000 S3,650,000 900,000 1,400,000 1,350,000 472,500 Department Revenue S6,000,000 2,500,000 500,000 $9,000,000 Room $900,000 1,050,000 150,000 $2,100,000 Food and Bev Other Total Other Variable Other Fixed Costs Pre-Tax Income Tax Net Income 877,500 1) What is the contribution ratio for the Happy Valley Inn? 2) What is the break-even level of Sales for the Happy Valley Inn? 3) What level of sales are needed to earn $1,000,000 in net income? 4) What level of Room Sales are needed to earn S1,000,000 in net income? 5) What would be the projected net income at $10,000,000 in Sales?
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