Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer all parts of this question Required information The following information applies to the questions displayed below) Fifth Street Publishing (FSP) was founded many

please answer all parts of this question image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Required information The following information applies to the questions displayed below) Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it! retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job. including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow.. Supplying Department Accounting (employees) Computer Services (hours) Direct cost Using Department Computer Accounting Services Member 0% 10% 10% 60% 10% $9,000 $37,000 $140,000 Conmercial 80% 30% $340,000 Required: . Suppose FSP allocated service department costs using the direct method. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.) Member Department Commercial Department Total Account ng Computer services S 0S 0S Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job. including allocated overhead, commercial jobs are priced based on what the market will bear FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow Accounting services Member Comercial Supplying Department Accounting (employees) Computer Services (hours) Direct cost 59,000 $37.000 $140,000 $340.000 b. Suppose that after reviewing the results, the controller tells the cost accountant to change the percentage of computer time so 40 percent is shown as used by the Member Department and 50 percent is shown as used by the Commercial Department would this be ethical? Yes or No Yes c. Suppose the controller tells the cost accountant to use employee wages instead of number of employees to allocate accounting department cost. Employees in the Commercial Department earn lower salaries. Based on the above assumption, choose the correct statement(s) from below (Select all that apply Check All That Apply it is done simply to shift cost to the one department, it se it is done simply to shift cost to the one department, it doesn't seem to be unethical Oo oo the accounting staff has more paperwork because of the higher wages, then this request is unethical the accounting staff has more paperwork because of the higher wages, then this request is not unethical d. Although FSP's policy is to allocate service department costs using the direct method, the controller asks the cost accountant to allocate the costs using the step method, allocating Computer Service Department costs first. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your final answers to the nearest whole dollar amounts.) Computer Accounting Member Department Commercial Department Service dept. costs - Before allocation Computer services Accounting Total ODS e. The controller next asks the cost accountant to allocate the costs using the reciprocal method. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) From: Accounting Computer service Member Department Commercial Department Service dept. costs - Before allocation Accounting Computer service Total Suppose the controller tells the cost accountant to use each month the method that allocates the highest cost to the Member Department. Would this be ethical Yes or No

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting For Business

Authors: Colin Drury, Mike Tayles

8th Edition

1473778808, 978-1473778801

More Books

Students also viewed these Accounting questions