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General Media manufactures cassettes and CDs in separate divisions utilizing one plant location. The following data have been prepared for review. Fixed operation costs
General Media manufactures cassettes and CDs in separate divisions utilizing one plant location. The following data have been prepared for review. Fixed operation costs Practical capacity Budgeted usage: Cassette Division CD Division Budgeted variable cost per hour $900,000 2,500 hours 2,000 hours 350 hours $400 per hour What is the allocated cost to the two General Media divisions, respectively, if the single rate is $1,000? Assume that the Cassette and CD Divisions used 1,750 and 200 hours, respectively. $807,692 rounded and $92,308 rounded $900,000 and $200,000 $1,750,000 and $200,000 $2,800,000 and $320,000 $900,000 and $320,000 The Bonawitz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 200,000 to 300,000 copies: Fixed costs per year Variable costs Budgeted long-run usage in copies per year: Marketing Department Operations Department $30,000 3 cents (.03) per copy 60,000 copies 190,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 40,000 copies and by the Operations Department was 180,000 copies. If a single-rate cost allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department? Assume actual usage is used to allocate copying costs. $9,000 $6,000 $6,500 $4,800 $8,400 ) Joe's Tire Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Standard service hours used 200 Number of employees 10 Personnel Dept. 200 20 Production Dept. A 240 Production Dept. B 160 40 120 What is the cost allocated from the Maintenance Department to Department A using the step-down method if the Personnel Department is allocated first? $48,706 $12,000 $14,118 $48,000 $5,000
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