Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 16Q
When using the sequential distribution method of distributing service department costs, if a service department receives services from other service departments, will those costs be allocated back to it even though it was the first service department distributed?
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What are support departments, and why are their costs allocated to other departments? What process is used to allocate support department costs?
Why does dual cost allocation improve the resulting allocation of service department costs?
Which of the following methods recognizes some (but not all) of the services that occur between service departments?
Indirect method.
Step-down method.
Reciprocal-services method.
Dual-cost allocation method.
Direct method.
Chapter 4 Solutions
Principles of Cost Accounting
Ch. 4 - What are factory overhead expenses, and what...Ch. 4 - What are three categories of factory overhead...Ch. 4 - What are the distinguishing characteristics of...Ch. 4 - When a products cost is composed of fixed and...Ch. 4 - What effect does a change in volume have on total...Ch. 4 - Distinguish between a step-variable cost and a...Ch. 4 - What is the basic premise underlying the high-low...Ch. 4 - What are the advantages and disadvantages of the...Ch. 4 - Differentiate between an independent variable and...Ch. 4 - Prob. 10Q
Ch. 4 - What is a flexible budget, and how can management...Ch. 4 - How does accounting for factory overhead differ in...Ch. 4 - What is the function and use of each of the two...Ch. 4 - What are two types of departments found in a...Ch. 4 - What are the two most frequently used methods of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - Is it possible to close the total factory overhead...Ch. 4 - What are the shortcomings of waiting until the...Ch. 4 - What are the two types of budget data needed to...Ch. 4 - Prob. 21QCh. 4 - What factory operating conditions and data are...Ch. 4 - Prob. 23QCh. 4 - How does activity-based costing differ from...Ch. 4 - What steps must a company take to successfully...Ch. 4 - What is the relationship between activity-based...Ch. 4 - Prob. 27QCh. 4 - Prob. 28QCh. 4 - If the factory overhead control account has a...Ch. 4 - Prob. 30QCh. 4 - Classify each of the following items of factory...Ch. 4 - Ames Automotive Company has accumulated the...Ch. 4 - Prob. 3ECh. 4 - Using the data in E4-2 and spreadsheet software,...Ch. 4 - El Paso Products Company has accumulated the...Ch. 4 - Computing unit costs at different levels of...Ch. 4 - Identifying basis for distribution of service...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - Compute the total job cost for each of the...Ch. 4 - Classify each of the following items of factory...Ch. 4 - Job 25AX required 5,000 for direct materials,...Ch. 4 - Job 19AB required 10,000 for direct materials,...Ch. 4 - Match each of the following cost pools with the...Ch. 4 - The books of Petry Products Co. revealed that the...Ch. 4 - The general ledger of Lawson Lumber Co. contains...Ch. 4 - Nelson Fabrication Inc. had a remaining credit...Ch. 4 - Housley Paints Co. had a remaining debit balance...Ch. 4 - The cost behavior patterns below are lettered A...Ch. 4 - Miller Minerals Co. manufactures a product that...Ch. 4 - Scattergraph method Using the data in P4-2 and a...Ch. 4 - Using the data in P4-2 and Microsoft Excel: 1....Ch. 4 - Listed below are the budgeted factory overhead...Ch. 4 - Menlo Materials is divided into five departments,...Ch. 4 - Distribution of service department costs to...Ch. 4 - Journalizing the distribution of service...Ch. 4 - Channel Products Inc. uses the job order cost...Ch. 4 - Determining job costcalculation of predetermined...Ch. 4 - Focus Fabrication Co. uses ABC. The factory...Ch. 4 - Mansfield Manufacturing Co. uses ABC. The factory...Ch. 4 - Hughes Products Inc. uses a job order cost system....Ch. 4 - Abbey Products Company is studying the results of...Ch. 4 - The following information, taken from the books of...Ch. 4 - Rockford Company has four departmental accounts:...Ch. 4 - Luna Manufacturing Inc. completed Job 2525 on May...Ch. 4 - Phillips Products, Inc. had a remaining credit...Ch. 4 - Nathan Industries had a remaining debit balance of...Ch. 4 - Chrome Solutions Company manufactures special...Ch. 4 - Activity-based Costing
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- When using the sequential distribution method of distributing service department costs, if each of two service departments services the same number of other departments, how is it determined as to which service department to allocate first?arrow_forwardWhy is the diect method of support department cost allocation less accurate than the sequential and reciproval services methods?arrow_forwardWhen allocating service department costs to production departments, why is the standard cost that the service department was expected to incur, rather than the actual cost that was incurred, used in the allocation?arrow_forward
- The order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used. True or False True Falsearrow_forwardWhich of the following describe the reciprocal method for cost allocation: Select one: O a. Simultaneously allocates costs among operation departments, and then to other operation departments then to support departments O b. Simultaneously allocates costs among support departments, and then to other support department then to operating departments O. Simultaneously allocates costs among operation departments, and then to support department O d. Simultaneously allocates costs among support departments, and then to operating departmentarrow_forwardAssigning indirect costs to departments is completed by ________.arrow_forward
- a) Allocate the service department costs to the two operating departments using the direct method.arrow_forwardWhat value, if any, would DLN get by allocating costs of each department based on the activities done in that department?arrow_forwardQ. Allocate the service department costs to the two operating departments using(i) the step-down method (Allocate Administrative Services first)(ii) the step-down method (Allocate Maintenance Services first)arrow_forward
- Which service department cost allocation method provides for reciprocal allocation of service costs among the service department as well as to the revenue producing departments? a. Method of Algebra b. Step method c. Indirect method d. direct method e. None of the abovearrow_forwardWhat is conceptually the most defensible method for allocating support-department costs? Why?arrow_forwardWhich method would you recommend that Ballantine Corporation use to allocate service-department costs? Why?arrow_forward
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What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License