Question
Required information Skip to question [The following information applies to the questions displayed below.] Tampa Instrument Company manufactures gauges for construction machinery. The company has
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[The following information applies to the questions displayed below.] Tampa Instrument Company manufactures gauges for construction machinery. The company has two production departments: Machining and Assembly. There are three service departments: Maintenance, Human Resources (HR), and Computer Aided Design (CAD). The usage of these service departments output during the year just completed is as follows:
Provision of Service Output (in hours of service) | ||||||||||||
Provider of Service | ||||||||||||
User of Service | HR | Maintenance | CAD | |||||||||
HR | ||||||||||||
Maintenance | 500 | |||||||||||
CAD | 500 | 500 | ||||||||||
Machining | 5,000 | 3,000 | 5,000 | |||||||||
Assembly | 6,000 | 3,500 | 2,000 | |||||||||
Total | 12,000 | 7,000 | 7,000 | |||||||||
The budgeted costs in Tampa Instrument Companys service departments during the year are as follows:
HR | Maintenance | CAD | |||||||||
Variable | $ | 66,000 | $ | 86,000 | $ | 66,000 | |||||
Fixed | 240,000 | 190,000 | 350,000 | ||||||||
Total | $ | 306,000 | $ | 276,000 | $ | 416,000 | |||||
When Tampa Instrument Company established its service departments, the following long-run needs were anticipated.
Long-Run Service Needs (in hours of service) | ||||||||||||
Provider of Service | ||||||||||||
User of Service | HR | Maintenance | CAD | |||||||||
HR | ||||||||||||
Maintenance | 1,000 | |||||||||||
CAD | 3,000 | 1,000 | ||||||||||
Machining | 3,500 | 4,000 | 4,200 | |||||||||
Assembly | 4,500 | 2,000 | 2,800 | |||||||||
Total | 12,000 | 7,000 | 7,000 | |||||||||
Required: Use dual cost allocation in conjunction with each of the following methods to allocate Tampa Instrument Companys service department costs: (1) direct method and (2) step-down method.
1. Direct method combined with dual allocation. a. Variable costs b. Fixed costs c. Total costs allocated
- eq 1A
- Req 1B
- Req 1C
Direct method combined with dual allocation for variable costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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Direct method combined with dual allocation for fixed costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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Direct method combined with dual allocation for total costs allocated. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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Step-down method combined with dual allocation for variable costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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Step-down method combined with dual allocation for fixed costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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Step-down method combined with dual allocation for total costs allocated. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
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