Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 2E
To determine
The cost of
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1 Manufacturing Overhead Distribution Worksheet The following are selected operating data for 2 the production and service departments of Bluestone Company for 2019 3 Departments Service Production 4 1 2 1 2 6 Overhead costs (identified by department) $ 48,400 82,200 25,440 516,000 32,584 $1,439,000 Indirect materials 7 $97,200 $144,000 Indirect labor 8 7,200 9 Square feet of building floor space used 10 Assessed value of equipment used 11 Cubic yards of factory space used 4,800 24,000 12,000 $ 21,000 63,000 126,000 210,000 88,000 132,000 12
Hel
Jordan Services Company has 68 employees, 26 of whom are assigned to Division A and 42 to Division B. Jordan incurred $413,440
of fringe benefits cost during year 2.
Required
Determine the amount of the fringe benefits cost to be allocated to Division A and to Division B.
Allocated
Cost
Division
A
B
Accounting
Question 3
Barns Ltd. has three production departments: A, B, and C, and two service
departments: Stores and Maintenance. The company absorbs its overhead costs
on a machine hour basis in depts. A and B, and a labour hour basis in department
C. The entity apportions indirect wages using labour hours worked in each
department. The company has budgeted its production overhead costs for the
forthcoming year as follows:
Indirect wages
Depreciation of plant
Rent
Power
Canteen costs
Plant insurance
The following information is also available:
Labour Hours
Plant value
Floor area (sq.
m)
Machine hours
Employees
Stores
requisitions
KWH ('000)
A
9,000
$130,000
40,000
Material
Direct Labour A
Direct Labour B
Direct Labour C
12,000
75
10,000
Machine hours A
Machine hours B
$
96,000
376,000
147,000
72,000
123,000
117,500
100
B
C
7,000 16,000
$70,000 $20,000
30,000
20,000
15,000
60
8,000
60
5,000
50
2,000
60
Stores Main.
4,000
4,000
$5,000 $10,000
10,000
5,000
nil
8
nil
40 kilos @ $5 per…
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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- Exercise 11-31 (Algo) Cost Allocation: Reciprocal Method, Two Service Departments (LO 11-1) Activity and selected costs for three production departments (Training, Independent, and Commercial) and two service departments (Accounting and Facilities) at DuBay Films for the past month follow: Supplying Department Accounting Facilities Direct cost From: Service department costs Accounting Facilities Total allocations Direct costs Total costs Accounting $ 0 0.20 $ 250,000 Required: Allocate service department costs to Training, Independent, and Commercial using the reciprocal method. What are the total costs of Training, Independent, and Commercial after this allocation? Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. Accounting $ 0 $ Facilities 0.40 0 $ 214,500 0 $ Using Department Training 0.30 0.20 $ 390,000 Facilities 0 Cost Allocation To: Training $ 0 $ Independent…arrow_forwardExercise 11-32 (Algo) Cost Allocation: Reciprocal Method (LO 11-4) Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow: Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Machining Assembly Machining $ 140,000 Assembly 80,000 Maintenance 47,000 — 0.2 0.5 0.3 Cafeteria 38,000 0.8 — 0.1 0.1 Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.)arrow_forwardExercise 12-8A (Algo) Allocating costs among products LO 12-3 Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected Costs Direct labor Direct materials Home 1 $ 75,000 91,000 Home 2 $ 106,000 139,000 Home 3 $ 172,000 195,000 Assume Rundle needs to allocate two major overhead costs ($35,300 of employee fringe benefits and $21,250 of indirect materials costs) among the three jobs. Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. Note: Round "Allocation rate" to 2 decimal places. Fringe Benefits: Home Allocation Rate × Weight of Base = Allocated Cost 1 = 2 x = 3 x = Total Indirect Materials: Home Allocation Rate × Weight of Base = Allocated Cost 1 x = 2 × = 3 x Total The cost components to determine the total cost of each house: Expected Costs Direct labor Direct materials Fringe benefits Indirect materials…arrow_forward
- 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? 4,500arrow_forward· Deavayded departments (S1 and S2) and two producing departments (P1 and P2). Department data for April were as follows: Company has two service si P27,000 S2 Overhead costs P18,000 Services provided to: si -0- 20% S2 10% -0- 50% 40% P1 30% P2 50% What is the total allocated service department cost to P2 if the company uses the reciprocal method of allocating its service department costs? P19,800 P21,949 P22,500 P23,051arrow_forwardExercise 11-31 (Algo) Cost Allocation: Reciprocal Method, Two Service Departments (LO 11-1) Activity and selected costs for three production departments (Training. Independent, and Commercial) and two service departments (Accounting and Facilities) at DuBay Films for the past month follow: Supplying Department Accounting Facilities Direct cost From: Service department costs Accounting Facilities Total allocations Accounting 8 0.20 $ 190,000 Direct costs Total costs Facilities 0.40 $ 184,500 Required: Allocate service department costs to Training, Independent, and Commercial using the reciprocal method. What are the total costs of Training, Independent, and Commercial after this allocation? Note: Amounts to be deducted should be indicated by a minus sign. Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amounts. Accounting Using Department Training 0.30 0.20 $ 330,000 Facilities Independent 0.20 0.20 $ 201,000 Cost Allocation To: Training…arrow_forward
- A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950arrow_forwardRefer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the reciprocal method to allocate support department costs. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. 2. Develop a simultaneous equations system of total costs for the support departments. Solve for the total reciprocated costs of each support department. (Round reciprocated total costs to the nearest dollar.) 3. Using the reciprocal method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. (Round all allocated costs to the nearest dollar.) 4. What if the square footage in Fabricating were 13,300 and the square footage in Assembly were 5,700. How would that affect the allocation of support department costs?arrow_forwardCurrent Attempt in Progress Flint's Medical operates three support departments and two operating units, Surgery and ER. The support departments are allocated based on the hours used. The cost of operating the accounting (acct), administration (admin), and human resources (HR) departments is $269300, $161200, and $66300, respectively. Information on the hours used are as follows: Hours in Acct Hours in Admin Hours in HR Acct $0. $204645. $190888. O $216942. 16 8 Admin HR 48 eTextbook and Media 20 8 Surgery 360 120 65 ER 220 80 What are the total costs allocated to the ER department from the supporting departments? (Do not round the intermediate calculations.) 130 Attemnte: 0 of Queedarrow_forward
- To better match cost to revenues Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here. Maintenance Utilities Overhead costs incurred $18,700 $9,000 Service provided to: Maintenance Dept. 10% Utilities Dept. 20% Producing Dept. A 40% 30% Producing Dept. B 40% 60% Using the step method, how much of Lewisville's Corporation’s Utilities Department cost is allocated between Departments A and B? (order of allocation begins with Maintenance) Group of answer choices $9,900 $10,800 $12,740 $27,700 In order to better match cost with revenues, Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here. Maintenance Utilities Overhead costs incurred $18,700 $9,000 Service provided to: Maintenance Dept. 10% Utilities Dept. 20%…arrow_forwardReciprocal Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Support Departments Human Resources $150,000 Human Resources 1,500 General Factory Human Resources General Factory $330,000 0 60 ✓ Producing Departments 14,000 ) The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the reciprocal method to allocate support department costs. Fabricating Assembly $114,800 $95,000 Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the reciprocal method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by General Factory 45 X…arrow_forwardcussions Question 6 -/1 ferences View Policies laborations Current Attempt in Progress ileyPLUS Support Cherryville Company charges $61 per hour for labor and has a 42% material loading charge. A recent job required 20 hours and $2,000 of materials. Calculate the total cost of the job. HL Central ffice 365 Badges O $4,060 O $4,572.40 Piazza O $3,220 O $2,840 8:43 PM ) 11/18/2019 hp ho 1 ins prt sc delete home end K4 backspace lock P 7 home K 4 enterarrow_forward
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