Which of the following describes reciprocal support?assembling department provides services to three other departmentsmolding provides services to production and accounting provides services to both molding and productionthe accounting department provides services to productionthe materials management department provides support to all departments including

The organization to which it belongs has an accounting department that offers accounting services…

Answered: Which of the following describes…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter24: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 3E

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The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?
Which of the following is the most difficult but most accurate of the commonly used methods for allocating support department costs to production departments? Oa. reciprocal services method Ob. direct method Oc. activity-based management method Od. sequential method
Which of the following terms is commonly used to describe the departments within a company that provide a necessary service to produce a product but are not directly involved in production? a. expense departments b. support departments c. costing departments d. investment center departments
Which of the following describe the reciprocal method for cost allocation: Select one: O a. Simultaneously allocates costs among operation departments, and then to other operation departments then to support departments O b. Simultaneously allocates costs among support departments, and then to other support department then to operating departments O. Simultaneously allocates costs among operation departments, and then to support department O d. Simultaneously allocates costs among support departments, and then to operating department
For each of the following support departments, identify a cost driver that could be used for allocating the support department costs to the profit center:a. Legalb. Duplication servicesc. Electronic data processingd. Central purchasinge. Telecommunicationsf. Accounts receivable
Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels? Multiple Choice Unit-level activity Batch-level activity Customer-level activity Organization sustaining activity
1. Activity Levels Determine the appropriate level for each of the following activities or costs. Indicate whether the activity is unit-level (UL), batch-level (BL), product-level (PL), facility-level (FL): A) Equipment setups B) Plant supervision C) Prime costs D) Packaging and shipments E) Designing, changing and advertising F) Heating, lighting G) Research and development H) Product order processing
Identifying basis for distribution of service department costs What would be the appropriate basis for distributing the costs of each of the following service departments to the user departments? Building maintenance Inspection and packing Machine repair Human resources Purchasing Shipping Raw materials storeroom
Explain how each activity in this list can be associated with the corresponding unit or batch level provided. A. Assembling products: unit level B. Issuing raw materials: batch level C. Machine setup: batch level D. Inspection: unit level E. Loading the labeling machine: batch level F. Equipment maintenance: batch level G. Printing a banner: unit level H. Moving material: batch level I. Ordering a part: batch level
Explain how each activity in this list can be associated with the corresponding unit or batch level provided. A. Assembling products: batch level B. Issuing raw materials: unit level C. Machine setup: unit level D. Inspection: batch level E. Loading the labeling machine: unit level F. Equipment maintenance: unit level G. Printing a banner: batch level H. Moving material: unit level i. ordering a part: unit level
18. Which of the following would be an appropriate allocation base for support department costs associated with an accounting department? a. Number of accounting transactions processed b. Number of purchase requisitions prepared c. Square footage of the office space occupied by accounting d. Number of units of product sold
3. Machinery, computers, and human skills and abilities are part of an organization's a. Environment Inputs Conversion process d. Outputs b. C. e. Division of labor

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