Question 1 1.5 points Saved Naples Corporation has two service departments (Maintenance and Human Resources) and three production departments (Machining, Assembly, and Finishing). The two service departments service each other as well as the production departments, and studies have shown that Maintenance provides the greater amount of service. Given the various cost allocation methods, which of the following choices correctly denotes whether Maintenance cost would be allocated to Human Resources? Direct Step-Down Reciprocal A. Yes No Yes B. Yes No No C. Yes Yes Yes D. No Yes No E. No Yes Yes Choice D Choice A O Choice B Choice C Choice EQustion 2 1.5 points Trek, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly). The company allocates Building Maintenance cost on the basis of square footage and believes that Building Maintenance provides more service than Human Resources. The square footage occupied by each department follows. Human Resources 7,000 Building Maintenance 11,000 Machining 20,000 Assembly 28,000 Assuming use of the direct method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)? 7' 66,000. 7 18,000. ' More information is needed to judge. 48,000. 0 55,000. Question 3 1.5 points Saved The Dahle Manufacturing Company has two production departments (Assembly and Finishing) and two service departments (Human Resources and Janitorial). The projected usage of the two service departments is as follows: Use of Human Resources Use of Janitorial Human resource 5 % Janitorial 10 % --- Assembly 60 % 40 % Finishing 30 % 55 The budgeted costs in the service departments are: Human Resources, $90,000 and Janitorial, $50,000. Using the direct method, the amount of Janitorial Department cost allocated to the Finishing Department is: O $28,947. O $24,843. O $21,053. $34, 157. $25,000.| Marshall Welding Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. Cafeteria 20 Human Resources 30 Machining 100 Assembly 150 Marshall Welding uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the frm than Cafeteria. How much Human Resources cost would be allocated to Machining? 0 $444,444. ' None of the answers is correct. 7 $428,572. $0. $480,000. Qustlon 5 1.5 points The Covington Clinic has two service departments (Human Resources and Information Systems) and two "production" departments (Inpatient Treatment and Out-patient Treatment). The service departments service the "production" departments as well as each other, and studies have shown that Information Systems provides the greater amount of service. Which of the following allocations would not occur if Covington uses the step- down method of cost allocation? ' In-patient Treatment cost would be allocated to Out-patient Treatment. ' Human Resources cost would be allocated to In-patient Treatment. Information Systems cost would be allocated to Human Resources. 0 Both Human Resources cost would be allocated to Information Systems and In-patient Treatment cost would be allocated to Out-patient Treatment. Human Resources cost would be allocated to Information Systems. Question 6 1.5 points Saved Under dual-cost allocation, fixed costs are allocated on the basis of a user department's: neither long-run usage nor short-run usage of a service department's output. long-run usage and short-run usage of a service department's output. either long-run usage or short-run usage of a service department's output. long-run usage of a service department's output. short-run usage of a service department's output.Question 7 1.5 points Saved Which of the following methods would be of little use when allocating service department costs to production departments? The net-realizable-value method. The direct method. The dual-cost allocation method. The reciprocal-services method. The step-down method.Question 8 1.5 points Saved Stoney Brook Company produces two products (X and Y) from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Joint manufacturing costs for the year were $60,000. Sales values and costs were as follows: If Processed Further Product Units Sales Price Made at Split-Off Sales Value Separable Cost X 9,000 $ 40,000 $ 78,000 $ 10,500 Y 6,000 80,000 90,000 7,500 If the joint production costs are allocated based on the physical-units method, the amount of joint cost assigned to product X would be: O $24,000. $20,000. $40,000. $30,000. $36,000.Question 9 1.5 points Saved Kingston Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $80,000 in the production of 20,000 gallons of P and 60,000 gallons of Q. Kingston can sell P and Q at split-off for $2.20 per gallon and $2.60 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows: P Q Separable processing costs $ 15,000 $ 35,000 Sales price (per gallon) if processed beyond split-off $ 3 $4 The joint cost allocated to P under the relative-sales-value method would be: $16,400. $25,600. None of the answers is correct. O $17,600. $24,000.Question 10 1.5 points Saved Corey Corporation manufactures joint products W and X. During a recent period, joint costs amounted to $300,000 in the production of 20,000 gallons of W and 60,000 gallons of X. Both products will be processed beyond the split-off point, giving rise to the following data: W X Separable processing costs $ 40,000 $ 160,000 Sales price (per gallon) if processed beyond split-off $ 14 $ 12 The joint cost allocated to W under the net-realizable-value method would be: O None of the answers is correct. $75,000. $80,000. $90,000. O $84,000