+ eBook 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. Department Machining Assembly Maintenance Cafeteria Direct Costs $160,000 65,000 45,000 30,000 Proportion of Services Used by Maintenance cafeteria Machining Assembly Maximum Amount 8.5 0.1 0.1 Caro estimates that the variable costs in the Maintenance Department total $12,000, and in the Cafeteria variable costs total $17,000. Avoldable fixed costs in the Maintenance Department are $8,000. Required: If Caro outsources the Maintenance Department, what is the maximum It can pay an outside vendor without increasing total costs? (Do not round Intermediate calculations.)

+ eBook 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. Department Machining Assembly Maintenance Cafeteria Direct Costs $160,000 65,000 45,000 30,000 Proportion of Services Used by Maintenance cafeteria Machining Assembly Maximum Amount 8.5 0.1 0.1 Caro estimates that the variable costs in the Maintenance Department total $12,000, and in the Cafeteria variable costs total $17,000. Avoldable fixed costs in the Maintenance Department are $8,000. Required: If Caro outsources the Maintenance Department, what is the maximum It can pay an outside vendor without increasing total costs? (Do not round Intermediate calculations.)

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Direct Departmentcosts S1 S1 S2 P1 P2 60,000 100,000 0.20 160,000 140,000 S2 P1 P2 0.700.10 0.2O 0.300.50 Under the step-method of cost allocation, the amount of costs allocated from S2 to P2 would be: Select one: a. $53,250. b. $62,500. c. $50,000 d. $88,750. SSSS
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
Objective: Consider that you are an analyst at Regeneron Pharmaceuticals. You need to decide how to allocate administrative overhead costs to Regeneron's main commercial products (Eylea, Dupixent, Kevzara and Praluent). Determine how to appropriately allocate the costs in the table below to each of the commercial products using an allocation methodology of your choice. Department2019 Annual Operating ExpenseTime spent supporting Commercial productsCommercial$200MM100%IT$100MM25%Facilities$150MM0%Finance$25MM20%Human Resources$75MM10% Use the supporting document Net Product Sales of REGN Products to facilitate your analysis. Provide a written summary of how you allocated the overhead costs to each product in an outline of no more than one page. As a starting point, it's recommended that you revisit the material we covered in Chapter 12. Guidance on calculations:Start off with Net Product Sales of REGN Products. Your objective pertains to 2019 expenses, so you should be reviewing 2019…
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control From: Service department costs Repair Quality control Total Direct Costs Repair $ 132,600 94,200 40,200 242,740 Proportion of Services Used by Quality Control 0 0.3 Repair 0.3 0 Fabricating Finishing Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) 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. Quality Control Cost Allocation To: 0.5 0.1 0.2 0.6 Fabricating Finishing
Required information [The following information applies to the questions displayed below.] 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: Department Machining Assembly Maintenance Cafeteria. Machining Assembly Direct Costs $92,000 62,400 38,800 31,000 Total Costs Proportion of Services Used by Maintenance Cafeteria. Machining 0.8 0.2 Required: Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.) Prev 0.6 0.1 1 2 Assembly of 13 0.2 0.1 # www Next > Bi G
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Direct Costs Repair $ 147,600 112, 200 48,300 90,300 Required A Required B Required: Use the step method to allocate the service costs, using the following: 0 0.6 From: Proportion of Services Used by Quality Control Fabricating a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Complete this question by entering your answers in the tabs below. Repair 0.2 0 Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be…
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 148,000 0.70 0.10 0.20 S2 $ 179,000 0.20 0.30 0.50 P1 $ 209,000 P2 $ 148,000 Under the step method of cost allocation, the amount of costs allocated from S2 to P2 would be: Note: Do not round intermediate calculations.
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 148,000 0.70 0.10 0.20 S2 $ 179,000 0.20 0.30 0.50 P1 $ 209,000 P2 $ 148,000 Under the step method of cost allocation, the amount of costs allocated from S2 to P2 would be: Note: Do not round intermediate calculations. Multiple Choice $176,625. $89,500. $92,750. $102,000.
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 146,000 0.70 0.10 0.20 S2 $ 187,000 0.20 0.30 0.50 P1 $ 178,000 P2 $ 179,000 Under the direct method of cost allocation, the amount of S1 costs allocated to P1 would be: Note: Do not round intermediate calculations. $14,600. $148,500. $58,667. $48,667.
Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 72,000 0.70 0.10 0.20 S2 $ 157,000 0.20 0.30 0.50 P1 $ 214,000 P2 $ 179,000 Under the step method of allocation, the total amount of service costs allocated to producing departments would be: Multiple Choice $174,000. $178,600. $74,000. $229,000.
4 Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT -- Service department costs IT allocation Accounting allocation HR allocation Total costs allocated 0% 10% Accounting HR 0% 20% 0% -- 10% $ -- The direct costs of the service departments in the previous period were $91,000 for IT, $116,000 for Accounting, and $155,000 for HR. IT West 40% 40% 60% Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. East 40% 60% 20% Accounting 0 $ 0 $ Check my work HR 0 $ West 0 $ East 0