1. Hera Inc. has four production departments: Molding, Cutting, Welding, and Polishing. The company incurred joints costs of $1,000,000 during the year. The allocation of the joint costs of production is done based on the net realizable value of the output. We are provided with the following details for Hera Inc. Particulars Molding department Cutting department Welding department Polishing department Net realizable value $1,500,000 $1,700,000 $1,000,000 $800,000 Cost targets $250,000 $600,000 $220,000 $180,000 Which of the departments will experience the most adverse impact due to the allocation of joint costs?

A.)Molding department

B.)Cutting department

C.)Welding department

D.)Polishing department

2. Jean is the manager of the manufacturing department in company called Tyche. During the year, Jean discovered that she had exceeded the cost targets for the year by $500,000. When questioned about it, she stated that the excess cost was because of the support costs allocated to the department, over which Jean has no control. Which of the following statements support her claim?

A.)The manufacturing department requires 4,000 labor hours to meet the target output. During the year, the department used 5,000 labor hours.

B.)The support department costs were allocated based on the square feet area of the production premises. The floor area of the manufacturing facility is 10,500 square feet.

C.)The support costs were allocated based on the number of employees. The manufacturing department was assigned 40 employees, but Jean requested for 20 additional employees.

D.)The raw material costs increased by 1.5 times during the year. Alternative raw materials were in short supply and could not be procured.