Question
Required information [The following information applies to the questions displayed below.] Tampa Instrument Company manufactures gauges for construction machinery. The company has two production departments:
Required information
[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 | 1,000 | ||||||||||
| CAD | 1,000 | 1,000 | |||||||||
| Machining | 3,000 | 2,000 | 4,000 | ||||||||
| Assembly | 5,000 | 3,000 | 2,000 | ||||||||
| Total | 10,000 | 6,000 | 6,000 | ||||||||
The budgeted costs in Tampa Instrument Companys service departments during the year are as follows:
| HR | Maintenance | CAD | |||||||||
| Variable | $ | 65,000 | $ | 80,000 | $ | 65,000 | |||||
| Fixed | 240,000 | 228,000 | 310,000 | ||||||||
| Total | $ | 305,000 | $ | 308,000 | $ | 375,000 | |||||
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 | 500 | ||||||||||
| CAD | 1,500 | 400 | |||||||||
| Machining | 3,000 | 4,000 | 4,500 | ||||||||
| Assembly | 5,000 | 1,600 | 1,500 | ||||||||
| Total | 10,000 | 6,000 | 6,000 | ||||||||
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
Direct method combined with dual allocation for variable costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
| |||||||||||||||||||
Direct method combined with dual allocation for fixed costs. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
| |||||||||||||||||||
Direct method combined with dual allocation for total costs allocated. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started