A-2 36Arbon Company has three service departments and two operating departments. Selected data concerning the fivedepartments are presented below:CostsNumber of employeesSquare metres ofspace occupiedMachine-hoursService DepartmentsEquipmentAdministrative Janitorial Maintenance Prep Finishing Total$36,000 $256,100 $498,600 $950,500$67,800$92,00080602406003001,2803001,2001,0002,000 7,000 11,50026,000 54,000 80,000The company allocates service department costs by the step-down method in the following order: Administrative(number of employees), Janitorial (space occupied), and Equipment Maintenance (machine-hours).Departmental costs beforeallocationsAllocations:Required:Using the step-down method, allocate the service department costs to the operating departments. (Negative amountsshould be indicated by a minus sign.)AdministrativeJanitorialMaintenanceTotal costs after allocation$Operating DepartmentsService DepartmentsAdministrative Janitorial Maintenance Prep Finishing Total0 $0 $0 $OperatingDepartments0 $lo0

Cost allocation is the process wherein the costs are identified and allocated to the appropriate…

Answered: Arbon Company has three service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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! Required information The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Costs Number of employees Square feet of space occupied Hours of press time Departmental costs before allocations Allocations: Service Departments Administration Janitorial Maintenance $ 154,000 $ 115,500 $ 52,800 140 20,000 Administration costs Janitorial costs Maintenance costs Total costs after allocations The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). $ 60 15,000 Required: Using the step-down method, allocate the service department costs to the operating departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations.) Service…
Original costs Proportion of Administrative hours used Proportion of Information Systems hours used Proportion of Maintenance hours used (a) Total costs Administrative Institutional $77,000 0.20 Operating Segments 0.10 Support Departments Information Systems Maintenance $110,600 $62,000 0.10 Retail 0.10 0.10 0.10 Operating Segments Institutional Retail $649,000 $351,000 0.45 0.40 Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct method. (Round interme 0.30 0.35 0.30 0.50
A summary of the usage of the service department services by other service departments as well as by the two producing departments is as follows: Equipment Building Production Dept. Service Cost Center Supervision Maintenance Occupancy Dept.1 Dept. 2 Supervision Equipment maint. Building occunpany 10% Direct costs in the various departments are as follows: 10% 5% 40% 45% 45% 55% 10% 35% 45% Direct Cost P 35,000 Label si S2 Department Supervision Équipment maintenance Building occupancy Production Dept. No. 1 Production Dept. No. 2 If the direct method of allocation is used, how much of the supervision departinent's eost would be allocated to the building occupancy department? (Start with Building occupancy, then Supervision) 30,000 90,000 350,000 450,000 S3 PI P2 а. 0 b. P1,750 с. Р3,500 d. P5,250
The following information is departmental cost allocation with two service departments and two production departments. Percentage Service Provided to Department Cost S1 S2 P1 P2 Service 1 (S1) $ 47,000 0 % 20 % 40 % 40 % Service 2 (S2) 37,000 20 0 20 60 Production 1 (P1) 270,000 Production 2 (P2) 320,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first?
The following information is departmental cost allocation with two service departments and two production departments. Department Cost Percentage Service Provided to S1 S2 P1 P2 Service 1 (S1) $ 32,000 0% 25% 30% 45% Service 2 (S2) 23,000 20 0 20 60 Production 1 (P1) 130,000 Production 2 (P2) 180,000 What is the total cost in P1 and P2 and what is the amount of service department cost allocated to P1 and P2 using the step method with S1 going first? The following information relates to a joint production process for three products, with a total joint production cost of $165,000. There are no separable processing costs for any of the three products. Product Sales Value at Split-Off Units at Split-Off 1 $ 181,500 320 2 99,000 960 3 49,500 1,920 $ 330,000 3,200 What percentage of joint cost is allocated to each of the three products using the sales value at split-off method? Do not give answer in image
4 Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT -- Service department costs IT allocation Accounting allocation HR allocation Total costs allocated 0% 10% Accounting HR 0% 20% 0% -- 10% $ -- The direct costs of the service departments in the previous period were $91,000 for IT, $116,000 for Accounting, and $155,000 for HR. IT West 40% 40% 60% Required: Use the direct method to allocate the service department costs to the production departments. Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. East 40% 60% 20% Accounting 0 $ 0 $ Check my work HR 0 $ West 0 $ East 0
Service Department Cost Allocation Presented below are certain operating data for the four departments of Tally Manufacturing Company. Service Production 1 2 1 2 Total manufacturing overhead costs either identifiable with or allocated to each department $120,000 $144,000 $180,000 $196,000 Square feet of factory floor space 80,000 160,000 Number of factory workers 60 20 Planned direct labor hours for the year 40,000 60,000 Allocate, to the two production departments, the costs of service departments 1 and 2, using factory floor space and number of workers, respectively, as bases. Do not round bases when calculating reallocations of service departments. Production 1 2 Identifiable and allocated overhead Reallocation of service departments: Dept. 1 Factory floor space Dept. 2 Number of factory workers Total manufacturing overhead What is the apparent overhead rate for each…
Use the information in the following table to compute each department’s contribution to overhead (both in dollars and as a percent). Which department contributes the largest dollar amount to total overhead? Which department contributes the highest percent (as a percent of sales) to total overhead? Dept. A Dept. B Dept. C Sales $ 53,000 $ 180,000 $ 84,000 Costs of goods sold 34,185 103,700 49,560 Gross profit 18,815 76,300 34,440 Total direct expenses 3,660 37,060 7,386
Use the information in the following table to compute each department's contribution to overhead (both in dollars and as a percent). (Round Contribution percent to 1 decimal place.) Dept. A Dept. B Dept. C Sales Cost of goods sold Gross profit $ 55.000 $ 219,000 $ 85,000 113,880 105,120 45,050 39,950 34,650 20,350 4,380 Total direct expenses 38,320 9,366 Contribution to overhead Contribution percent (of sales) Which department contributes the largest dollar amount to total overhead?
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow: Service Department Operating Department A B C 1 2 Total Overhead costs £ 100,000 £ 115,000 £ 73,000 £ 266,500 £ 289,000 £ 843,500 Number of employees 57 33 132 297 198 717 Square feet of space occupied 12,600 7,100 21,000 42,000 105,000 187,700 Hours of press time 34,000 68,000 102,000 The company allocates service department costs by the step method in the following order: A (number of employees), B (space occupied), and C (hours of press time). The company makes no distinction between variable and fixed service department costs. Required: Using the step method, allocate the service department costs to the operating departments. (Do not round intermediate calculations. Amounts to be deducted…
2. Arbon Company has three service departments and two operating departments. Selected data concerning the five departments are presented below: Costs Number of employees Square metres of space occupied Machine-hours Administrative $84.000 80 300 Service Departments Janitorial $67,800 60 1.200 to Equipment Maintenance $36.000 240 1,000 Service Operating Departments Prep $256.100 600 2,000 10,000 Finishing $498.600 * 300 7.000 30,000 The company allocates service department costs by the step-down method in the following order: Administrative (number of employees). Janitorial (space occupied), and Equipment Maintenance (machine-hours). Required: Using the step-down method, allocate the service department costs to the operating departments. Total $942.500 1.280 11.500 40,000 Operating Donartments
Dolphin Company has two service departments, S1 and S2 and three production departments, P1, P2 and P3. The following data relate to Dolphin Company's allocation of service department costs: Number of Employees S1 S2 IP1 P2 P3 O $13,333 The allocation of costs from S2 to S1 would be: O $4,800 Cost O $0 80,000 40,000 100,000 800,000 1,200,000 O $10,000 S1 allocates its costs on the basis of number of employees. S2 allocates its costs on the basis of kilowatt hours. The order of allocation for Dolphin Company is S1 first and S2 second. Dolphin Company uses the direct method to allocate its service department costs. Problem 3-4 2 3 3 6 6 Kilowatt Hours 600 400 500 1,000 2,500

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