Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Question
Chapter 4, Problem 4.41AP
1.
To determine
To calculate: the company’s current plant-wide
2.
To determine
To calculate: refined departmental overhead rates for the company.
3.
To determine
To identify: which job (Job 500 or Job 501) uses more of company’s resources.
4.
To determine
To calculate: the total amount of overhead allocated to each job if the company uses plant-wide overhead rate.
5.
To determine
To calculate: the total amount of overhead allocated to each job is the company uses departmental overhead rates.
6.
To determine
To identify: whether or not both allocation systems accurately reflect the resources that each job used.
7.
To determine
To calculate: total
8.
To determine
To calculate: profit earned on each job using plant-wide overhead rate & actual profit earned on each job using departmental overhead rates.
9.
To determine
To comment: on the results obtained in requirement 7 & requirement 8.
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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
Sciences
Business Administration
Required 1
Annual Cost
$119,000
199,000
424,000
Required 2
Budgeted
Enrollment
1,200
900
800
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:
Registrar
Computer Services
Complete this question by entering your answers in the tabs below.
Budgeted
Credit Hours
32,000
29,550
23,500
Planned Courses
Requiring
Computer Work
12
26
26
Choose the better allocation base for distributing the cost to…
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 4 Solutions
Managerial Accounting (5th Edition)
Ch. 4 - (Learning Objective 1) Cost distortion is more...Ch. 4 - (Learning Objective 2) The first step in computing...Ch. 4 - (Learning Objective 2) Activities incurred...Ch. 4 - (Learning Objective 3) Which of the following is...Ch. 4 - (Learning Objective 3) The potential benefits of...Ch. 4 - (Learning Objective 4) Lean operations are...Ch. 4 - Prob. 7QCCh. 4 - (Learning Objective 4) Concerning lean operations,...Ch. 4 - (Learning Objective 5) Which of the following is...Ch. 4 - (Learning Objective 5) Which of the following...
Ch. 4 - Understanding key terms (Learning Objectives 1, 2,...Ch. 4 - Use departmental overhead rates to allocate...Ch. 4 - Compute departmental overhead rates (Learning...Ch. 4 - Prob. 4.4SECh. 4 - Prob. 4.5SECh. 4 - Calculate a job cost using ABC (Learning Objective...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Determine the usefulness of refined costing...Ch. 4 - Prob. 4.10SECh. 4 - Identifying costs as value-added or...Ch. 4 - Identify lean production characteristics (Learning...Ch. 4 - Identify the DOWNTIME activities at a manufacturer...Ch. 4 - Prob. 4.14SECh. 4 - Classifying costs of quality (Learning Objective...Ch. 4 - Quality initiative decision (Learning Objective 5)...Ch. 4 - Assess the impact of a quality initiative...Ch. 4 - Identify ethical standards violated (Learning...Ch. 4 - Compare traditional and departmental cost...Ch. 4 - Compute activity rates and apply to jobs (Learning...Ch. 4 - Apply activity cost allocation rates (Learning...Ch. 4 - Using ABC to bill clients at a service firm...Ch. 4 - Compare traditional and ABC allocations at a...Ch. 4 - Compare traditional and ABC allocations on a job...Ch. 4 - Use ABC to allocate manufacturing overhead...Ch. 4 - Continuation of E4-25A: Determine product...Ch. 4 - Prob. 4.27AECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.29AECh. 4 - Compare traditional and departmental cost...Ch. 4 - Prob. 4.31BECh. 4 - Prob. 4.32BECh. 4 - Prob. 4.33BECh. 4 - Compare traditional and ABC cost allocations at a...Ch. 4 - Prob. 4.35BECh. 4 - Prob. 4.36BECh. 4 - Prob. 4.37BECh. 4 - Prob. 4.38BECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.40BECh. 4 - Prob. 4.41APCh. 4 - Use ABC to compute full product costs (Learning...Ch. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45APCh. 4 - Prob. 4.46BPCh. 4 - Prob. 4.47BPCh. 4 - Comprehensive ABC implementation (Learning...Ch. 4 - Using ABC in conjunction with quality decisions...Ch. 4 - Comprehensive ABC (Learning Objectives 2 3)...Ch. 4 - Prob. 4.51SCCh. 4 - Discussion Questions 1. Explain why departmental...Ch. 4 - ABC in Real Companies Choose a company in any of...Ch. 4 - Value-Added versus Non-Value-Added at a Restaurant...Ch. 4 - Ethics involved with ABC and hazardous waste costs...
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