Adventures Company provides event management services. The company has three employees, each assigned to specific customers. The company considers each employee'sterritory as a business segment. The following data relate to its three segments for the month of June:Sale RevenueVariable costsFrancisco$7,000$5,700Liu$11,800$7,200Jordan$14,350$11,500The business segments had the following number of customers: Francisco, 25; Liu, 28; and Jordan, 35. The total fixed costs for the month of June amount to $3,300. Whichbusiness segment was the most profitable?OA. JordanOB. Both Francisco and Liu are equally profitableOC. LiuOD. Francisco

Contribution Margin -The indicator that helps us determine how much of a company's net sales goes…

Answered: Adventures Company provides event…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Month Special Analyses CustomerAccounts PaychecksProcessed AccountingService Costs 1 1 190 1,100 $ 58,800 2 1 260 1,010 61,600 3 2 270 1,170 59,200 4 2 250 920 59,100 5 3 160 1,280 60,600 6 2 170 1,180 61,900 7 1 340 830 59,000 8 4 220 1,220 61,400 9 3 150 1,210 61,300 10 1 230 1,270 60,100 11 2 220 1,130 60,200 12 2 300 930 61,200 13 3 190 1,010 59,700 14 3 290 1,120 60,700 15 4 300 910 60,500 16 2 180 980 60,200 Totals 36 3,720 17,270 $ 965,500 In addition to the above information, you learn that the accounting department had the following total…
The Central Valley Company is a manufacturing firm that produces and sells a single product. The company’s revenues and expenses for the last four months are given below. Central Valley CompanyComparative Income Statement March April May June Sales in units 6,200 5,700 7,050 8,400 Sales revenue $ 762,600 $ 701,100 $ 867,150 $ 1,033,200 Less: Cost of goods sold 402,800 378,594 450,918 526,932 Gross margin $ 359,800 $ 322,506 $ 416,232 $ 506,268 Less: Operating Expenses Shipping expense $ 63,900 $ 53,600 $ 67,400 $ 65,000 Advertising expense 88,000 88,000 88,000 88,000 Salaries and commissions 164,400 137,000 167,500 171,500 Insurance expense 15,000 15,000 15,000 15,000 Amortization expense 48,000 48,000 48,000 48,000…
The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Month Special Analyses CustomerAccounts PaychecksProcessed AccountingService Costs 1 2 325 1,029 $ 63,800 2 4 310 993 68,900 3 2 302 1,268 64,000 4 1 213 1,028 61,300 5 2 222 984 61,600 6 0 214 712 50,800 7 1 131 762 51,020 8 1 123 739 54,300 9 0 115 708 50,500 10 2 296 1,232 64,800 11 2 213 978 58,000 12 1 222 929 57,500 13 2 217 1,059 62,200 14 2 132 942 54,900 15 4 300 1,299 71,530 16 4 315 1,283 64,800 Totals 30 3,650 15,945 $ 959,950 In…
Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
The following cost data pertain to the operations of Montgomery Department Stores, Ic., for the month of July. Corporate legal office salaries Apparel Department cost of sales-Evendale store Corporate headquarters building lease Store manager's salary-Evendale Store Apparel Department sales commission-Evendale Store store utilities-Evendale Store Apparel Department manager's salary-Evendale store Central warehouse lease cost 2$ 62,600 2$ 98,700 67,800 $ 18,100 2$ 9,000 2$ 12,500 9,700 $ 17,200 2$ Janitorial costs-Evendale Store 12,000 The Evendale Store is just one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company's stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of the…
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal office salaries $ 62,600 Apparel Department cost of sales—Evendale Store $ 98,700 Corporate headquarters building lease $ 67,800 Store manager’s salary—Evendale Store $ 18,100 Apparel Department sales commission—Evendale Store $ 9,000 Store utilities—Evendale Store $ 12,500 Apparel Department manager’s salary—Evendale Store $ 9,700 Central warehouse lease cost $ 17,200 Janitorial costs—Evendale Store $ 12,000 The Evendale Store is one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company’s stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store?…
Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT IT tickets HR 1,575 Employees 16 0 Publishing 2,520 24 Binding 2,205 40 Department direct costs $ 156,000 $ 248,850 $ 433,000 $ 397,500 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. From: Service department costs IT HR Total Cost Allocation To: HR Publishing Binding $ ° $ ° $ 0 $ 0
The centralized employee travel department of Bourgeois Company has costs of $405,600. The department has serviced a total of 3,900 travel reservations for the period. The South Division has made 2,260 reservations during the period, and the West Division has made 1,640 reservations. Additional data for the two divisions is following below: SouthDivision WestDivision Sales $3,150,470 $2,929,810 Cost of goods sold 1,638,240 1,669,990 Selling expenses 786,360 718,100
The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease Cosmetics Department sales commissions-Northridge Store Corporate legal office salaries Store manager's salary-Northridge Store Heating-Northridge Store Cosmetics Department cost of sales-Northridge Store Central warehouse lease cost Store security-Northridge Store Cosmetics Department manager's salary-Northridge Store Multiple Choice O The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department? $84,360 O $41,960 O $37,700 86,000 $ 5,300 $32,400 57,300 $ 11,700 $ 14,400 $ 32,400 $ 13,900 $ 16,300 $ 4,260
The following cost data pertain to the operations of SM Department Stores Inc., for the month of December: Corporate legal office salaries- 68,000 Shoe Department cost of sales (SM North Store)- 68,000 Corporate headquarters building lease- 86,000 Store manager’s salary (SM North Store)- 10,000 Shoe Department sales commissions (SM North Store)- 5,000 Store utilities (SM North Store)- 11,000 Shoe Department manager’s salary (SM North Store)- 3,000 Central warehouse lease cost- 5,000 Janitorial costs (SM North Store)- 11,000 The SM North Store is just one of many stores owned and operated by the company. The Shoe Department is one of many departments at the SM North Store. The central warehouse serves all of the company’s stores. What is the total amount of costs listed above that are NOT direct costs of the SM North Store?
Sandhill Company has two service departments (personnel and financial) that provide services for one another as well as for two production departments, assembly and finishing. Data for the month follow: Personnel Financial Assembly Finishing Employees 6 8 18 16 Payroll $16,200 $12,900 $29,600 $28,200 Personnel department costs were $79,700, and financial department costs were $44,300. Sandhill uses employees as the allocation base for personnel department costs and payroll costs for financial department costs
The following cost data pertain to the operations of Montgomery Department Stores, Incorporated, for the month of July. Corporate legal office salaries Apparel Department cost of sales-Evendale Store Corporate headquarters building lease Store manager's salary-Evendale Store Apparel Department sales commission-Evendale Store Store utilities-Evendale Store Apparel Department manager's salary-Evendale Store Central warehouse lease cost Janitorial costs-Evendale Store $ 56,000 $ 90,000 $ 48,000 $ 12,000 $ 7,000 $ 11,000 $ 8,000 $ 15,000 $ 9,000 The Evendale Store is one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company's stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of…

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