Asaaap The accountant for Sam Inc. is preparing the budgetsfor operating department support service costs.Maintenance costs are allocated based on square feet,and cafeteria costs are allocated based on number ofemployees. The following data have been collected:Support Departments Operating DepartmentsMaintenance Cafeteria Cutting Packaging Direct costs $50,000 $45,000 $275,000 $300,000 Number ofemployees 15 10 150 250 Square feet1,500 2,000 3,500 4,000 If the step-down method isused and maintenance is allocated first, the total costallocated to the cutting department will be $55,757 $39,243 $20,822 $40,208. I need help withexplanation. Thanks!

Areas for Further Clarification:Unit Cost: The cost breakdown doesn't explicitly show the unit cost.…

Answered: The accountant for Sam Inc. is…

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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The accountant for Sam Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs $ 50,000 $45,000 $275,000 $300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000 If the step-down method is used and maintenance is allocated first, the total cost allocated to the cutting department will be $55,757 $ 39,243 $20,822 $40,208. I need help with explanation. Thanks!
Nanda Company has two service departments, Maintenance and Personnel. Maintenance Department costs of P160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of P40,000 are allocated based on the number of employees. The costs of operating departments A and B are P80,000 and P120,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Support Departments Production Departments Maintenance A B Department Budgeted costs P160,000 P40,000 P80,000 P120,000 Budgeted ΝΑ 400 480 320 maintenance-hours Number of employees 20 ΝΑ 80 240 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up) Personnel Department
Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $160,000 3,200 Network center Number of devices monitored 735,000 9,800 Electronic mail Number of user accounts 100,000 10,000 Handheld Technology support Number of handheld devices issued 124,600 8,900 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has 5,200 employees, of whom 25% are office…
Salado Inc. provides cleaning services through its Residential and Commercial divisions. Support services of the company are provided by Personnel and Administration areas. Costs of these two areas are allocated to the revenue producing departments. Personnel costs are allocated using number of employees; administration costs are allocated using direct department costs. The following annual budgeted information (presented in a benefits-provided ranking) is available: Personnel Administration Residential Commercial Direct costs $196,000 $252,000 $672,000 $1,120,000 Number of employess 17 42 101 67 Direct labor hours 84,000 126,000 Square feet cleaned 630,000 798,000 a. Using the direct method, allocate the costs of Personnel and Administration to the Residential and Commercial divisions. Total support costs allocated to Residential = $ Total support costs allocated to Commercial = $ b. Using the step method, allocate the costs of Personnel and…
Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $55,660 2,200 Network center Number of devices monitored 668,100 10,200 Electronic mail Number of user accounts 57,500 5,750 Handheld technology support Number of handheld devices issued 153,600 9,600 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has 1,000 employees, of whom 50% are office employees.…
Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and activity bases used by the CCS department. The table also includes some assumed cost and activity base quantity information for each service for October. CCS ServiceCategory Activity Base Budgeted Cost Budgeted ActivityBase Quantity Help desk Number of calls $82,350 2,700 Network center Number of devices monitored 631,125 9,350 Electronic mail Number of user accounts 63,500 6,350 Handheld technology support Number of handheld devices issued 140,800 8,800 One of the profit centers for Middler Corporation is the Communication Systems (COMM) sector. Assume the following information for the COMM sector: The sector has 1,000 employees, of whom 30% are office employees.…
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $310,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $192,000 and $288,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Budgeted costs Budgeted maintenance-hours Number of employees Support Departments OA $200,588 OB. $124,235 OC. $135415 OD. $74,260 Maintenance Personnel Department Department $310,000 $170,000 NA 900 Production Departments A B $192,000 $288,000 1,210 660 75 NA 660 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) 290
Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services Department (CCS) costs to profit centers. The following table lists the types of services and cost drivers for each service. The table also includes the budgeted cost and quantity for each service for August. CCS Services Cost Drivers Budgeted Cost Budgeted Quantityof Services Help desk Number of calls $90,000 3,600 Network center Number of devices 120,000 1,500 Electronic mail Number of user accounts 160,000 5,000 Smartphone support Number of smartphones issued 72,000 4,000 One of the profit centers for Varney Corporation is the Communication Systems (COMM) division. Assume the following information for COMM: COMM has 2,500 employees, of whom 20% are office employees. All of the office employees have been issued a smartphone, and 95% of them have a computer on the network. One hundred percent of the employees with a computer also…
Westmore Company has two service departments and two operating departments. Budgeted costs and other data relating to these departments are presented below:Building Operating Department& Grounds Personnel A BDepartmental costs ..... $54,000 $200,000 $650,000 $800,000Square feet occupied ... 1,000 3,000 12,000 15,000Number of employees .... 10 5 45 55Direct laborhours ..... 76,000 92,000The costs of Building & Grounds are allocated first on the basis of square feet of space occupied. Personnel costs are allocated on the basis of numberof 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 laborhours.Assume that the company uses the direct method of allocating service department costs. The predetermined overhead rate that would be used in Department B would be closest to:a. $11.50/DLH.b. $12.00/DLH.c. $10.00/DLH.d. $10.22/DLH.
Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing and Communications Services Department (CCS) costs to profit centers. The following table lists the types of services and cost drivers for each service. The table also includes the budgeted cost and quantity for each service for August. CCS ServiceCategory Cost Drivers Budgeted Cost Budgeted Quantityof Services Help desk Number of calls $50,400 2,800 Network center Number of devices monitored 170,100 2,100 Electronic mail Number of user accounts 151,700 4,100 Smartphone support Number of smartphones issued 115,600 3,400 One of the profit centers for Varney Corporation is the Communication Systems (COMM) sector. Assume the following information for COMM: • COMM has 2,400 employees, of whom 40% are office employees. • All the office employees have been issued a smartphone, and 92% of them have a computer on the network. • Ninety percent of the employees with a…
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $216,000 and $324,000, respectively. Data on budgeted maintenance - hours and number of employees are as follows: Budgeted costs Budgeted maintenance - hours Number of employees Support Departments Maintenance Personnel Department Production Departments Department $370,000 ΝΑ A $170,000 $216,000 $324,000 800 1,270 630 B 65 ΝΑ 280 700 Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
Parker Company has two service departments—cafeteria and engineering—and two operating departments. The number of employees in each department is given below: Cafeteria 10 Engineering 40 Operating Department 1 500 Operating Department 2 200 The costs of the Cafeteria are allocated to other departments on the basis of the number of employees in the departments. If these costs are budgeted at $69,375, what would be the amount of cost allocated to Engineering under the direct method? Question 20 options: $ 3,700. $ 0. $ 3,750. $17,344.

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