Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance 50% Using Department Engineering Administration Maintenance Fabrication Assembly Ө 10% 0 0 20% 0 20% 0 10% 40% 50% 20% 20% 60% Direct cost $28,000 $217,600 $25,000 $195,000 $50,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Engineering Administration Maintenance Total Costs Allocated to: Fabrication Assembly $ 0 $ 0

Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance 50% Using Department Engineering Administration Maintenance Fabrication Assembly Ө 10% 0 0 20% 0 20% 0 10% 40% 50% 20% 20% 60% Direct cost $28,000 $217,600 $25,000 $195,000 $50,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Engineering Administration Maintenance Total Costs Allocated to: Fabrication Assembly $ 0 $ 0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Engineering Administration Maintenance Direct cost Engineering Administration Maintenance Using Department Engineering Administration Maintenance Fabrication Total 0 10% 0 $30,000 50% 0 30% Costs $213,300 Allocated to: Fabrication 0 20% 0 $40,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. (Do not round intermediate calculations.) Assembly 10% 50% 15% $200,000 Assembly 40% 20% 55% $50,000
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Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and M2). The following usage data for each of the service departments for the previous period follow. Repairs HR IT Repairs HR 10% 0% HR allocation IT allocation Total costs allocated Service department costs Repairs allocation 0% 10% IT 0% 20% M1 The direct costs of the service departments in the previous period were $40,000 for Repairs, $59,600 for HR, and $90,000 for IT. Required: Use the direct method to allocate the service department costs to the production departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Repairs 40% 35% 20% M2 60% 35% 70% HR IT M1 M2