Question 3 (20 marks) Andrew Company Limited has overhead cost in general support departments and it allocates the overhead cost to the various production departments. The following information is for the month of June: General support departments General maintenance General utilities $115,000 Administration supporting service provided to departments Overhead cost incurred General maintenance General utilities Production department X Production department Y $65,000 0% 25% 15% 0% 35% 40% 50% 35% 100% 100% Clearly show how the amount of general maintenance and general utilities overhead costs can be distributed to production departments X and Y for June using (1) the direct method and (2) the step-down method.

Question 3 (20 marks) Andrew Company Limited has overhead cost in general support departments and it allocates the overhead cost to the various production departments. The following information is for the month of June: General support departments General maintenance General utilities $115,000 Administration supporting service provided to departments Overhead cost incurred General maintenance General utilities Production department X Production department Y $65,000 0% 25% 15% 0% 35% 40% 50% 35% 100% 100% Clearly show how the amount of general maintenance and general utilities overhead costs can be distributed to production departments X and Y for June using (1) the direct method and (2) the step-down method.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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The following information pertains to Whitestone Industries for the year: Estimated total overhead costs Estimated direct labor costs Actual direct labor costs Actual overhead costs Activity base $37,500 25,000 22,500 36,000 Direct labor costs What is the predetermined overhead rate for Whitestone Industries for the year? Oa. 62.5% Ob. 66.7% Oc. 150% Od. 160%
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TB MC Qu. 11-53 (Algo) Cordner Corporation has two production departments... Cordner Corporation has two production departments, P1 and P2, and two service departments, S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by: Department Direct costs S1 S2 P1 P2 S1 $ 120,000 0.70 0.10 0.20 S2 $ 133,000 0.20 0.30 0.50 P1 $ 183,000 P2 $ 176,000 Under the step method of cost allocation, the amount of S2 costs allocated to S1 would be: Multiple Choice $55,200. $0. $26,600. $53,200.
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