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Please anwer all parts of manegerial accounting This is really an odd situation. said Jim Carter. general manager of Highland Publishing Company. We get most
Please anwer all parts of manegerial accounting
"This is really an odd situation." said Jim Carter. general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department. yet profits on those jobs never as high they ought be. On the other hand. we lose most of the jobs bid on that require lot of time in the Sinding Department. would inclined to think that problem with our cverhead rates. but we're already computing separate cn.'erhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Sinding departments supported by three service departmen& The costs of these service departments are allocated to other departments in the order listed below. T Personnel cost is allocated based on number of The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Occupied ae,geg Isa, e & 412, egg overhd te" to 2 and Custodial Printing Binding Total 8, see IA, Lge 33, ley ege 178 of of 12, gee le,aeg ze seg seg IS, se zee Budgeted overhead costs in each department for the current year are shown below: Custodial Printing Binding Total budgeted leg egg esg Because of its simplicity. the company has always used the direct method to allocate service department costs to the two operating departments. Regulred: I. using the step-doun method. allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the tv.n operating departments. machine-hours as the allocation base in the Printing Department and direct labor-Bourg as allocation base in the Sinding Department. 2. Repeat (I) a Oove. this time using the direct method. Again compute predetermined cwerhead rates in the Printing and Sinding departmen& 3. Assume during the current year the company bids on a job requiring machine and labor time as follows: Inting Binding Total 2, aeg 14 yeg a. Calculate the cwerhead cost assigned to the job if the company used the werhead rates developed in (I) abcwe_ Then calculate the overhead cost assigned to the job if the company used the overhead rates developed in (2) abwe. An this by a Re;uired 34 but t. n tabs RepuirQ using the stepdown , s rtment rates in two L_l machin ts tc the departn-*nts. as in Printing as the in the Bindir Note. enter allticns from dollar TotI as and allocatWns to as The add ns. R_Nnd sym s nc,ooc (330. coo) e 31.45g z 700 (135560) O 412,000 64,842 0 168,000 420.523 0 810,272
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