Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the attached form and there's 10 questions and I need it by the end of the day. thank you. In allocating factory service

Please answer the attached form and there's 10 questions and I need it by the end of the day. thank you.

image text in transcribed In allocating factory service department costs to producing departments, which one of the following items would most likely be used as an activity base? A. Units of product sold. B. Salary of service department employees. C. Units of electric power consumed. D. Direct materials usage. There are several methods for allocating service department costs to the production departments. The method that recognizes service provided by one service department to another but does not recognize reciprocal interdepartmental service is the A. Direct method. B. Variable method. C. Reciprocal method. D. Step-down method. Wilcox Industrial has two support departments, the Information Systems Department and the Personnel Department, and two manufacturing departments, the Machining Department and the Assembly Department. The support departments service each other as well as the two production departments. Company studies have shown that the Personnel Department provides support to a greater number of departments than the Information Systems Department. If Wilcox uses the reciprocal method of department allocation, which one of the following departmental allocations would occur? The costs of the A. Assembly Department are allocated to the Information Systems Department and the Personnel Department. B. Information Systems Department are allocated to the Machining Department and the costs of the Machining Department are allocated to the Assembly Department. C. Personnel Department are allocated solely to the Information Systems Department. D. Information Systems Department are allocated to the Personnel Department, Machining Department, and Assembly Department. Wilcox Industrial has two support departments, the Information Systems Department and the Personnel Department, and two manufacturing departments, the Machining Department and the Assembly Department. The support departments service each other as well as the two production departments. Company studies have shown that the Personnel Department provides support to a greater number of departments than the Information Systems Department. If Wilcox uses the direct method of departmental allocation, which one of the following cost allocations would occur? Some of the costs of the A. Personnel Department would be allocated to the Information Systems Department. B. C. Machining Department would be allocated to the Information Systems Department. Information Systems Department would be allocated to the Assembly Department. D. Assembly Department would be allocated to the Machining Department. A company has two service departments and is planning to use the reciprocal method to allocate service department costs. The following information from operations was collected for analysis. Budgeted overhead costs Human Resources $400,000 Data Processing 70,000 Machining 225,000 Assembly 125,000 Services furnished Labor Hours Human Resources to Data Processing 3,000 Machining 5,000 Assembly 8,200 Data Processing to Human Resources 600 Machining 3,500 Assembly 600 Which one of the following equations represents the complete reciprocated cost of the Data Processing Department? A. $70,000 + [(600 4,700) $400,000] C. $70,000 + [(3,000 16,200) $400,000] $70,000 (600 4,700) + $350,000 (3,000 16,200) D. $400,000 + [(600 16,200) $70,000] B. The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information: Quality Control Maintenance Machining Assembly Total Budgeted overhead costs before allocation $350,000 $200,000 $400,000 $300,000 $1,250,000 Budgeted machine hours --50,000 -50,000 Budgeted direct labor hours ---- 25,000 25,000 Budgeted hours of service: Quality Control -7,000 21,000 7,000 35,000 Maintenance 10,000 -18,000 12,000 40,000 If Rochester uses the direct method of allocating service department costs, the total service costs allocated to the assembly department would be A. $80,000 B. $87,500 C. $120,000 D. $167,500 The managers of Rochester Manufacturing are discussing ways to allocate the cost of service departments, such as Quality Control and Maintenance, to the production departments. To aid them in this discussion, the controller has provided the following information: Quality Control Maintenance Machining Assembly Total Budgeted overhead costs before allocation $350,000 $200,000 $400,000 $300,000 $1,250,000 Budgeted machine hours --50,000 -50,000 Budgeted direct labor hours ---25,000 25,000 Budgeted hours of service: Quality Control -7,000 21,000 7,000 35,000 Maintenance 10,000 -18,000 12,000 40,000 If Rochester uses the step-down method of allocating service costs beginning with quality control, the maintenance costs allocated to the assembly department would be A. $70,000 B. $108,000 C. $162,000 D. $200,000 M&P Tool has three service departments that support the production area. Outlined below is the estimated overhead by department for the upcoming year: Estimated Number of Service Departments Overhead Employees Receiving $25,000 2 35,000 2 Repair Tool 10,000 1 Production Departments Assembly 25 Bolting 12 The Repair Department supports the greatest number of departments, followed by the Tool Department. Overhead cost is allocated to departments based upon the number of employees. If M&P uses the direct method of allocation, how much of the Repair Department's overhead will be allocated to the Tool Department? A. $0 B. $875 C. $7,000 D. $11,667 Logo, Inc., has two service departments (the Systems Department and the Facilities Department) that provide support to the company's three production departments (Machining Department, Assembly Department, and Finishing Department). The overhead costs of the Systems Department are allocated to other departments on the basis of computer usage hours. The overhead costs of the Facilities Department are allocated based on square feet occupied (in thousands). Other information pertaining to Logo is as follows: Computer Square Feet Department Overhead Usage Hours Occupied Systems $200,000 300 1,000 Facilities 100,000 900 600 Machining 400,000 3,600 2,000 Assembly 550,000 1,800 3,000 Finishing 620,000 2,700 5,000 Total 9,300 11,600 Logo employs the step-down method of allocating service department costs and begins with the Systems Department. Which one of the following correctly denotes the amount of the Systems Department's overhead that would be allocated to the Facilities Department and the Facilities Department's overhead charges that would be allocated to the Machining Department? Systems to Facilities A. $0 $20,000 B. $19,355 $20,578 C. $20,000 $20,000 Facilities to Machining D. $20,000 $24,000 Directions: Select the best answer. A large company is in the process of allocating service department costs to revenue-generating departments. Under which one of the following allocation methods will the amount allocated to each revenue-generating department be different if the order in which service department costs are allocated is different? A. Step-down method. B. Direct method. C. Reciprocal method. D. Activity-based method

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

Cost Management Accounting And Control

Authors: Don R. Hansen, Maryanne M. Mowen

5th Edition

0324233108, 978-0324233100

More Books

Students also viewed these Accounting questions