Question
5. Dubey Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration,
5. Dubey Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to which value? Service Department
Telecommunications Administration Operating Departmetn
Surgery Recovery
Departmental costs.. $ 36,645 $ 28,783 $447,030 $ 636,700
Telecomunications ports.. 32 17 56 49
Employees.. 24 25 65 42
A. $473,169
B. $484,059
C. $481,336
D. $478,133
6. Pujol Children's Clinic allocates service department costs to operating departments using the step-down method. The clinic has two service departments, Administration and Information Technology (IT), and two operating departments, Prenatal and Pediatric. Data concerning those departments are presented in the chart below. Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatric Department cost after allocations is closest to which value?
Service Department Operating Department
Administration IT Prenatal Pediatric
Surgery Recovery
Departmental costs.. $ 82,152 $ 45,000 $680,660 $ 298,130
Employee... 15 26 131 169
Employees.. 15 26 120 168
A. $328,202
B. $361,823
C. $370,790
D. $370,659
9. Gustavson Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Administrative and Facilities, and two operating departments, Assembly and Wholesaling. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied. The total Wholesaling Department cost after the allocations of service department costs is closest to which value?
Service Department
Administration Facilities Operating Departmetn
Assembly Wholesaling
Departmental costs.. $ 26,840 $ 59,400 $183,430 $ 321,190
Telecomunications ports.. 4000 2000 56 15,000
Employees.. 2000 2000 65 6,000
A. $337,530
B. $340,426
C. $340,240
D. $331,090
12. The following data pertains to activity and utility cost for two recent periods: Utility cost is a mixed cost with both fixed and variable components. Using the high-low method, what would be the cost formula for utility cost? Activity level (units) 8,000 5,000 Utility cost $8,000 $6,500
A. Y = $1,500 + $1.25 X
B. Y = $1.25 X
C. Y = $1.00 X
D. Y = $4,000 + $0.50 X
13. Tarten Corporation uses the FIFO method in its process costing system. Operating data for the Curing Department for the month of March appear below: According to the company's records, the conversion cost in beginning work in process inventory was $7,470 at the beginning of March. The cost per equivalent unit for conversion costs for March was $8.20. How much conversion cost would be assigned to the units completed and transferred out of the department during March?
Percent Complete
with Respect to
Conversion
Units
Begging work in process inventory 9,000 10%
Transferred in from prior department during march...57,000
Completed and Transferred to the next department during March. 65,000
Ending work in process inventory. 1,000 70%
A. $533,090
B. $533,000
C. $525,530
D. $592,040
16. The following table presents information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company. The beginning work in process inventory included $11,000 of conversion cost. During the month, the Department incurred an additional $290,000 in conversion costs. Assuming that the company uses the weighted-average cost method, what is the cost per equivalent unit for conversion costs for the month in the Blending Department? Round to the nearest cent.
Percent Completion
Conversion Costs
Units
Begging work in process inventory 11,000 35%
Units started into production ....120,000
Units completed and transferred out.. 114,000
Ending work in process inventory. 17,000 30%
A. $2.50
B. $2.55
C. $2.53
D. $2.44
18. Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be the total cost recorded on the job cost sheet for Job 593
Direct Materials.. $3,190
Direct Labor-hours. 71 labor hours
Direct labor wage rate.. $15 per labor-hour
Machine- Hours 175 machine-hours
? A. $4,255
B. $6,705
C. $5,249
D. $3,219
20. Eagle Company's quality cost report is to be based on the following data: What would be the total prevention cost appearing on the quality cost report?
Quality data gathering, analysis, and reporting$59,000
Test and inspection of incoming materials.$48,000
Final product testing and inspection$27,000
Depreciation of test equipment..$30,000
Cost of field servicing and handling complaints.$52,000
Disposal of defective products$13,000
Downtime caused by quality problems.$52,000
Technical support provided to suppliers..$18,000
Returns arising from quality problems$39,000
A. $86,000
B. $48,000
C. $57,000
D. $77,000
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