Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 15E
1.
To determine
Allocate the budgeted costs of the library and computing services department to the college’s liberal arts and science departments using the direct method.
2.
To determine
Prepare an excel sheet for the given detail in requirement (1), assume that the budgeted costs of the library and computing services are $590,000 and $280,000, respectively.
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University of Tampa offers high-quality undergraduate-level programs. UT has two principal operating departments, College of Business and Sciences, and two support departments, Facility Services and Admissions. The base used to allocate facility services is budgeted total maintenance hours. The base used to allocate admissions costs is number of credit hours for a department. The Facility Services budget is $280,000, while Admissions budget is $450,000. Interdepartmental usage is as follows:
Services Provided: (Annually)
Facilities Admissions COB Sciences
Facilities 0 1,500 3,500 5,000
(in hours)
Admissions 1,000 0 15,000 9,000
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(a) Use the Direct Method to allocate support department costs. The amount of Facilities support costs allocated…
Hudson Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two
service departments, the Library and the Computing Services Department. The usage of these two service departments'
output for the year is as follows:
User of Service
Library
Computing Services
Liberal Arts
Sciences
Provider of Service
Computing
Services
20%
Library
Computing Services
Library
65%
35%
The budgeted costs in the two service departments for the year are as follows:
$1,090,000
550,000
30%
50%
Required:
1. Use the step-down method to allocate Hudson Community College's service department costs to the Liberal Arts and
Sciences departments. (Do not round intermediate calculations.)
Allocation of Computing Service costs
Allocation of Library costs
Total costs allocated to each department
Liberal Arts
Sciences
Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller is
trying to decide how to allocate the costs of the Admissions Department, the Registrar's Department, and the Computer Services
Department. The comptroller has compiled the following data for the year just ended.
Department
Admissions
Registrar
Computer Services
Division
Liberal Arts
Annual Cost
$136,000
233,000
492,000
Sciences
Business Administration
Budgeted
Budgeted
Enrollment Credit Hours
2,900
1,750
1,650
49,000
42,250
36,250
Required:
1. Distribute the departmental costs to the college's three divisions based on the allocation base given.
2. Choose the better allocation base for distributing the cost to the following departments:
Department and Allocation Base
Planned Courses
Requiring
Computer Work
Complete this question by entering your answers in the tabs below.
Admissions (enrollment)
Registrar (credit hours)
Computer Services (courses requiring…
Chapter 17 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
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