Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base. Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

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Answer 1

Question

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

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** Please don't use hand writing and don't copy and paste *** I want new and unique answer .. Thank you ACT 301 Q2. RCR has two support departments, X1 and X2, and two operating departments, Z1 and Z2. RCR has decided to use the direct method and allocate variable X1 dept. costs based on the number of transactions and fixed X1 dept. costs based on the number of employees. X2 dept. variable costs will be allocated based on the number of service requests and fixed costs will be allocated based on the number of computers. The following information is provided: Support Departments Operating Departments X1 X2 Z1 Z2 Total Department variable costs 12,500 15,000 95,000 52,500 Total department fixed costs 14,500 27,500 105,000 45,000 Number of transactions 38 45 175 112 Number of employees 14 18 38 30 Number of service requests 30 18 38 25 Number of computers 15 20 25 30 You are…

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Answer 2

Question

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

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Answer 3

Question

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

Expert Solution & Answer

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Answer 4

Question

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

Expert Solution & Answer

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Answer 5

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

Answer 6

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

Answer 7

Chapter 2.B, Problem 4C

1.

To determine

Introduction:

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.

Answer 8

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

Answer 9

2.

To determine

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

Answer 10

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

Answer 11

3.

a.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

Answer 12

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

Answer 13

3.

b.

To determine

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The reason the step-down method is a better base for computing the predetermined rates than the direct method.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 2.A - EXERCISE 2A-1 Activity-Based Absorption Costing...Ch. 2.A - EXERCISE 2A-2 Activity-Based Absorption Costing as...Ch. 2.A - EXERCISE 2A-3 Activity-Based Absorption Costing as...Ch. 2.A - PROBLEM 2A-4 Activity-Based Absorption Costing as...Ch. 2.A - Prob. 5P Ch. 2.A - CASE 2A-6 Activity-Based Absorption Costing and...Ch. 2.B - EXERCISE 2B-1 Overhead Rate Based on Capacity...Ch. 2.B - EXERCISE 2B-2 Overhead Rates and Capacity Issues...Ch. 2.B - Prob. 3P Ch. 2.B - Prob. 4C

Introduction: Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department. Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base. The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.

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Chapter 2 Solutions

Introduction:

Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.

Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.

Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.

The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.