Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 14P
Problem 4-17A Cost accumulation and allocation
Yalland Manufacturing Company makes two different products, M and N. The company’s two departments are named after the products; for example, Product M is made in Department M. Yalland’s accountant has identified the following annual costs associated with these two products:
| Financial data | |
| Salary of vice president of production division | $160,000 |
| Salary of supervisor Department M | 80,000 |
| Salary of supervisor Department N | 60,000 |
| Direct materials cost Department M | 300,000 |
| Direct materials cost Department N | 420,000 |
| Direct labor cost Department M | 240,000 |
| Direct labor cost Department N | 680,000 |
| Direct utilities cost Department M | 120,000 |
| Direct utilities cost Department N | 24,000 |
| General factorywide utilities | 36,000 |
| Production supplies | 36,000 |
| |
138,000 |
| Depreciation | 600,000 |
| Nonfinancial data | |
| Machine hours Department M | 5,000 |
| Machine hours Department N | 1,000 |
Required
- a. Identify the costs that are (1) direct costs of Department M, (2) direct costs of Department N, and (3) indirect costs.
- b. Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M and N.
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Students have asked these similar questions
Question No.6
Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers.
Product
Number of Orders
Number of Set-ups
Number of Labor Transactions
Labor Hours
XX
YY
Cost per pool
60
20
Rs.16,000
20
80
Rs.13,000
50
70
Rs.2,400
2,000
500
Rs.20,000
Required:
Compute the allocation rates for each of the activity drivers listed.
Allocate the overhead costs to product XX and product YY using activity-based costing.
Compute the overhead rate using machine hours under the functional-based costing system.
Allocate the overhead cost to Product XX and YY using the functional-based costing system overhead rate calculated in part C.
Problem 18 Service Cost Allocation
Irish Corporation distributes its service department overhead cost directly tto producing departments. Information for January, 2030 is presented below.
Maintenance Utilities
FOH cost 93,500 45,000
Service Provided to
Maintenance 10%
Utilities 20%
Mixing 40% 30%
Assembly 40% 60%
Required: Determined the amount of factory overhead cost of service departments allocated to producing departments using:
Direct Method
Step Method
Reciprocal Method
Problem 4
The Salty Mfg. Co. operates three producing departments, A, B and C. It uses the
weighted average costing method. The following data are on the production of
Department B for October, 2021:
Added in Department B
Transfer
Materials
Conversion
Units
In
(In pesos) Cost (PhP)
In process, Oct. 1
Received from Department A
Total
5,000
20,000
25,000
19,000
(in Pesos)
9,990
39,010
1,020
21,855
998
21,877
Transferred out
Normal Loss
1,000
Abnormal loss
500
In process, Oct. 31
Factory costs are applied evenly throughout the process. Beginning work in
process was 20% done while ending work in process is % done. Abnormal loss
occurred at the end of the process. What should be the accumulated cost of work
in process as of October 31 if the normal loss occurred during the process (with
adjustment for lost units based on the remaining good units?
4,500
Chapter 12 Solutions
Survey Of Accounting
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - LO 4-1Exercise 4-1A Direct versus indirect costs...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Exercise 4-4APooling overhead cost Ware...Ch. 12 - Prob. 5ECh. 12 - Exercise 4-5A Allocating overhead cost among...Ch. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Exercise 4-6AAllocating overhead costs among...Ch. 12 - Exercise 4-9AAllocating to solve a timing problem...Ch. 12 - Prob. 11ECh. 12 - Exercise 4-11AHow the allocation of fixed cost...Ch. 12 - Prob. 13ECh. 12 - Problem 4-17A Cost accumulation and allocation...Ch. 12 - Problem 4-18A Selecting an appropriate cost driver...Ch. 12 - Problem 4-19A Cost allocation in a service...Ch. 12 - Prob. 17PCh. 12 - Problem 4-21A Allocation to accomplish smoothing...Ch. 12 - Problem 4-22A Allocating indirect costs between...Ch. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - ATC 4-3 Research Assignment Using real-world data...Ch. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
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