22 Senen corporation has two service departments (maintenance and security)and two producing departments (assembly and finising).The following are the percentage usage of each departmentuse of maintenance deptuse of security deptMaintenance5 %Security10 %Assembly60 %40 %Finishing30 %55 %The maintenance department cost is 900,000 and security department cost is 500,00022Compute the service cost allocated to security department using direct method23Compute the service cost allocated to maintenance department using step method24compute the service cost allocated tosecurity department using reciprocal method

SOLUTION- OVERHEAD REFERS TO THE ONGOING BUSINESS EXPENSES NOT DIRECTLY ATTRIBUTED TO CREATING A…

Answered: 22 Senen corporation has two service…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 1CMA

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A summary of the usage of the service department services by other service departments as well as by the two producing departments is as follows: Equipment Building Production Dept. Service Cost Center Supervision Maintenance Occupancy Dept.1 Dept. 2 Supervision Equipment maint. Building occunpany 10% Direct costs in the various departments are as follows: 10% 5% 40% 45% 45% 55% 10% 35% 45% Direct Cost P 35,000 Label si S2 Department Supervision Équipment maintenance Building occupancy Production Dept. No. 1 Production Dept. No. 2 If the direct method of allocation is used, how much of the supervision departinent's eost would be allocated to the building occupancy department? (Start with Building occupancy, then Supervision) 30,000 90,000 350,000 450,000 S3 PI P2 а. 0 b. P1,750 с. Р3,500 d. P5,250
Senen corporation has two service departments (maintenance and security)and two producing departments (assembly and finishing). The following are the percentage usage of each department Use of Maintenance Department Use of Security Department Maintenance 5 % Security 10 % Assembly 60 % 40 % Finishing 30 % 55 % |The maintenance department cost is 900,000 and security department cost is 500,000 22 Compute the service cost allocated to security department using direct method 23 Compute the service cost allocated to maintenance department using step method 24 compute the service cost allocated tosecurity department using reciprocal method
Senen corporation has two service departments (maintenance and security) and two producing departments (assembly and finising). The following are the percentage usage of each department use of maintenance dept use of security dept Maintenance 5 % Security 10 % Assembly 60 % 40 % Finishing 30 % 55 % The maintenance department cost is 900,000 and security department cost is 500,000 Compute the service cost allocated to security department using direct method
Senen corporation has two service departments (maintenance and security) and two producing departments (assembly and finising). The following are the percentage usage of each department use of maintenance dept use of security dept Maintenance 5 % Security 10 % Assembly 60 % 40 % Finishing 30 % 55 % The maintenance department cost is 900,000 and security department cost is 500,000 Compute the service cost allocated to maintenance department using step method
Lewis Corporation has two service departments: Data Processing and Administration/Personnel. The company also has three divisions: X, Y, and Z. Data Processing costs are allocated based on hours of use and Administration/Personnel costs are allocated based on number of employees. Department Direct Costs Employees Hours of use Administration/ Personnel $400,000 10 3,300 Data Processing 850,000 5 1,100 X. 450,000 30 1,800 300.000 15 2,200 550.000 25 4,500 Assume that Data Processing provides more service than Administration/Personnel. Refer to Lewis Corporation. Assume that Data Processing costs have been allocated and the balance in Administration is $600,000. Using the step method, what amount is allocated to Z? Select one: a. $214,286 b. $200,000 c. $225,000 d. $112,500
ABC Company has an ABC system with three pools: Total cost in cost pool Activity Machine setups Customer service Maintenance $18,500 $5,000 Cost Driver $29,000 #setups O $9,000 #orders not enough information machine- hours $13,000 $6,000 $10,000 Compute total capacity costs allocated to product X. Activity volume (#cost driver units) Product X Product Y Total 45 15 25 20 5 25 65 20 50
Assume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Total Cost Total Activity $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 8,000 deliveries 5,000 manual orders 15,000 electronic orders 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Hospital A Hospital B Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 8. 25 30 15 0. 115 250 How much total activity cost should be assigned to Hospital A for internal management purposes? Multiple Choice $785 <…
A company makes a product R. which requires one each of two first-level components, 5 and T. Routing data for these items are as follows tem Operation No. Dept Work Center Run Time Per unit Setup Time Average Lot size No. No. Std hours) Std hours) R 10 12 0.80 1.50 20 10 12 16 0.50 0.60 40 20 14 1.20 2.00 40 10 16 1.00 0.40 40 20 14 0.30 1.20 40 (a) The Bill of Capacity for product R (in standard hours) at work center 12 is closest to:
ABC Company has an ABC system with three pools: Total cost in cost pool Total $13,000 Activity Product X Machine setups Customer service Maintenance Cost Driver Product Y #setups #orders machine- hours $6,000 $10,000 Compute total capacity costs allocated to product X. Group of answer choices $29,000 $9,000 $18,500 $5,000 not enough information Activity volume (#cost driver units) 45 15 25 20 65 5 20 25 50
The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively. Maintenance Accounting A B Machine hours 480 20 2,300 200 Number of employees 2 2 8 4 What is the cost of the Accounting Department's cost allocated to Department A using the step method and assuming the Maintenance Department's costs are allocated first? Note: Do not round intermediate calculations.
Extreme Manufacturing Company provides the following ABC costing information:ActivitiesTotal CostsActivity - cost driversAccount inquiry$390, 00013, 000 hoursAccount billing$ 275,0005, 000, 000 linesAccount verification accounts$130, 50060, 000 accountsCorrespondence letters $22, 0004, 000 lettersTotal costs$817,500 The above activities are used by Departments A and B (among other departments) as follows: Department ADepartment BAccount inquiry hours2, 500 hours4, 000 hoursAccount billing lines800, 000 lines650, 000 linesAccount verification accounts9, 000 accounts7, 000 accountsCorrespondence letters2, 000 letters2, 400 letters How much of correspondence costs will be assigned to Department A ? Question 12 Select one:A. $49, 500B. $11, 242C. $11,000D. $22,000
Thornton Corporation's computer services department assists two operating departments in using the company's information system effectively. The annual cost of computer services is $626,200. The production department employs 37 employees, and the sales department employs 25 employees. Thornton uses the number of employees as the cost driver for allocating the cost of computer services to operating departments. Required Allocate the cost of computer services to operating departments. Department Allocated Cost Production Sales

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