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I am having trouble with the attached Oak City Cost Allocation case study questions. This case is partially answered in the Partial Solution file, but

I am having trouble with the attached "Oak City Cost Allocation" case study questions. This case is partially answered in the "Partial Solution" file, but I need to be more expansive and thorough. Can you please flesh out these solutions? This includes answering Question 5, and including supporting calculations for Question 4, and adding more examples to Questions 2 and 6. I need this done as soon as possible.image text in transcribed

6929169 1) \"Cost\" as used in accounting literature is the monetary value of expenditures incurred for raw materials, supplies, labour, products, services and other equipment purchased for use by a business for use in its operations and for its activities. In the Oak City case, the term is being used as allocation of costs rather than determination of costs. The amount of total expenditures of Police and Fire Department were allocated to the Police Jurisdiction. The central cost issue of this case is the amount of cost associated with police and fire services that should be charged or allocated to police jurisdiction. 2) Various methods that Oak City could use for determining the \"cost\" of providing services to the city's police jurisdiction are - Case by case allocation: Determine a rate of actual expenditure of each department. - Developing a cost rate: Based on a set proportion or rate, the services may be allocated to the two departments of the police jurisdiction. 3) The city is currently using the second method, whereby Mike Johnson, the Finance Director has devised a rate for allocation of total expenditures to the police jurisdiction. It calculates the total service effort the city exerts for police and fire protection and the portion of these efforts that are provided in the police jurisdiction. The ratio of efforts in the jurisdiction to total service efforts is multiplied by total expenditures to get the amount to be charged to the jurisdiction. 4) Background of the case - My client, the plaintiff is the owner of Smith Lumber Company which became part of the Oak City's police jurisdiction in 1993. The city has collected excessive business license fees from her and other business owners in police jurisdiction, in excess of and in violation of state law.State Law requires the city to provide these services & permits it to charge the incremental cost of providing these services to businesses in the jurisdiction. The city has been allocating a portion of total costs to the jurisdiction and not just the variable costs. This is because most of their costs do not change in proportion to activity or the number of service calls. Most expenditure are fixed during a year and others such as overtime wages, fuel and equipment maintenance costs tend to vary with service hours while utility costs change with the number of service calls. If they charge for variable costs only, the fixed costs would not be recovered. All the equipment purchases and other fixed costs cannot be allocated to the jurisdiction straightway but must be capitalised. Then, they can be apportioned over a period of time. For example, equipment to be capitalised and depreciation on it should be charged to jurisdiction. 6) The ethical issues an accountant should consider in this case are - - Accepting a client's allocation of expenditure amount with partial or no documentation - Not determining the accuracy of oral or written representations made by the client - Failure to obtain sufficient relevant data to afford a reasonable basis for conclusions or recommendations in relation to any professional services performed

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