Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base. : The allocation of fixed administrative expenses among the three restaurants for this year.

Question

Want to see the full answer?

Answer 1

Question

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Question 9.2 Vision Limited manufactures a product that has the following costs: Per unit Per year Direct materials $6.00 Direct labour 5.00 Variable manufacturing overhead 4.00 Fixed manufacturing overhead $360,000 Variable SG&A expenses 5.00 Fixed SG&A expenses 120,000 The company applies the absorption costing approach to cost-plus pricing. The calculations are based on budgeted production and sales of 30,000 units per year.The company has spent $600,000 on this product and expects a return on investment of 15%.Required:a) Calculate the markup on absorption cost.b) Compute the target selling price of the product using the absorption costing approach.

Departmental Cost Allocation Robinson Products Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service depart- ment's efforts (in percentages) to the other departments is: To From S1 S2 P1 P2 S1 10% 20% ?% S2 10% 30 The direct operating costs of the departments (including both variable and fixed costs) are: S1 $180,000 S2 60,000 P1 50,000 P2 120,000 Required 1. Determine the total cost of P1 and P2 using the direct method. 2. Determine the total cost of P1 and P2 using the step method. 3. Determine the total cost of P1 and P2 using the reciprocal method.

EXERCISE 6–4 Basic Segmented Income Statement LO6-4 Roval Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow $7.50 Selling price per unit Variable expenses per unit $6.00 $2.40 $5.25 $45,000 $21,000 Traceable fixed expenses per year

Answer 2

Question

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Answer 6

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

Answer 7

Chapter 11, Problem 10E

1.

To determine

Cost allocation is a process of assigning or allocating indirect costs to every unit using a predetermined overhead rate. The predetermined overhead rate is determined by dividing the estimated total cost by the estimated activity base.

:

The allocation of fixed administrative expenses among the three restaurants for this year.

Answer 8

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

Answer 9

2.

To determine

There are two types of changes which are positive changes and negative changes. A positive change will reflect an increase in the cost allocated to the respective restaurant whereas a negative change reflects a decrease in fixed cost allocated to the department.

:

The change in each restaurant’s allocated costs from last year to this year.

Answer 10

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Answer 11

3.

To determine

A cost allocation base is referred to the factors or basis upon which an organization allocates its overhead costs. The major cost allocation base can be direct labor used, direct material used, machine hours used, an area used by each department, sales, profit earned, and so on.

To discuss:

The usefulness of sales dollars as an allocation base.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Prob. 3Q Ch. 11 - Prob. 4Q Ch. 11 - Prob. 5Q Ch. 11 - Prob. 6Q Ch. 11 - Prob. 7Q Ch. 11 - Prob. 8Q Ch. 11 - Prob. 9Q Ch. 11 - Prob. 10Q

Solution Summary: The author explains that cost allocation is the process of assigning or allocating indirect costs to every unit using a predetermined overhead rate.

Want to see the full answer?

Chapter 11 Solutions