Question

In: Accounting

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $180,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $137,500 and $165,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

Production
Support Departments                  Departments

Warehouse Department

Data Center Department

Music

Books

Budgeted costs

$370,000

$180,000

$137,500

$165,000

Budgeted warehouse-hours

NA

500

1050

1520

Number of computer hours

210

NA

900

1040

Using the step-down method, what amount of Warehouse Department cost will be allocated to the Books Department if the Data Center department is allocated first? (Do not round any intermediary calculations).

a.

$229,231
b.

$75,349
c.

$96,495
d.

$370,000

Solutions

Expert Solution

Answer :

a.

$229,231

Calculated as

Step down approach Warehouse Department Data Center Department Music Books Total
Overhead befor allocations $                                370,000 $                                180,000 $                           137,500 $ 165,000 $ 852,500
Allocation of utilities cost first $                            17,581.40 $                              (180,000) $                             75,349 $    87,070 $             -  
Allocation of Utilities cost $                             (387,581) $                                            -   $                           158,350 $ 229,231 $             -  
Total allocated cost $                                          (0) $                                            -   $                           371,199 $ 481,301 $ 852,500
Allocation of Data centre cost Warehouse Department Music Books Total
Ratio to distribute cost 210 900 1040 2150
. =180000*210/2150 =180000*900/2150 =180000*1040/2150
17581.39535 75348.83721 87069.76744 180000
Allocation of Maintenance cost Music Books Total
Ratio to distribute cost 1050 1520 2570
allocation of cost =387581.40*1050/2570 =387581.40*1520/2570
158350 229231 387581

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...
Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs are allocated on the basis of warehouse-hours. Data Center Department costs are allocated based on the number of computer hours. The costs of departments, warehouse-hours and number of computer hours are as follows: Support Departments Operating Departments Warehouse Data Center Music Books Departmental costs $ 60,000 $40,000 $60,000 $70,000 Warehouse-hours - 400 200 400 Computer hours 250 - 375 375 The total cost accumulated...
Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...
Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs are allocated on the basis of warehouse-hours. Data Center Department costs are allocated based on the number of computer hours. The costs of departments, warehouse-hours and number of computer hours are as follows: Support Departments Operating Departments Warehouse Data Center Music Books Departmental costs $ 60,000 $40,000 $60,000 $70,000 Warehouse-hours - 400 200 400 Computer hours 250 - 375 375 The total cost accumulated...
SHARMA's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...
SHARMA's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $360,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $475,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $142,500 and $171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: SUPPORT PRODUCTION Warehouse Department Data Center Department Music Books Budgeted costs $360,000...
Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...
Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs are allocated on the basis of warehouse-hours. Data Center Department costs are allocated based on the number of computer hours. The costs of departments, warehouse-hours and number of computer hours are as follows: Support Departments Operating Departments Warehouse Data Center Music Books Departmental costs $ 60,000 $40,000 $60,000 $70,000 Warehouse-hours - 400 200 400 Computer hours 250 - 375 375 The total cost accumulated...
Matt limited has two production, departments, machine department and assembly department. There are two service departments,...
Matt limited has two production, departments, machine department and assembly department. There are two service departments, stores and maintenance. The budgeted overheads of each department along with overheads that have yet to be apportioned are listed below, along with details which can be used for appointment. Total Machine Dept Assembly Dept Stores Maintenance K’000 K’000 K’000 K’000 K’000 Indirect labour 1 125 000 400 000 650 000 40 000 35 000 Indirect material 310 000 160 000 120 000 10...
CJ’s Motorcycle Store has two service departments: Maintenance and Personnel. The maintenance department’s costs are allocated...
CJ’s Motorcycle Store has two service departments: Maintenance and Personnel. The maintenance department’s costs are allocated on the basis of maintenance hours. The personnel department’s costs are allocated based on the number of employees. CJ has two production departments: Assembly and Repairs. The following data is provided to you for review: Support Departments Production Departments Maintenance Personnel Assembly Repairs Budgeted costs Support Departments Support Departments Production Departments Production Departments Maintenance Personnel Assembly Repairs Budgeted cost $320,000 $80,000 $160,000 $240,000 Budgeted...
Superman Store has two support departments, Information Systems and Personnel. The Information Systems Department costs are...
Superman Store has two support departments, Information Systems and Personnel. The Information Systems Department costs are allocated on the basis of hours used.  The Personnel Department costs are allocated based on the number of employees.  Data on information systems hours used and number of employees are as follows:             Information Allocation Bases:                                  Systems            Personnel            Fruit               Nut Total cost                                             $120,000          $30,000           $60,000           $90,000 Information systems hours used                600                   600                   720                480 Number of employees                               10                     20                     40                 120 a.  Write the equations needed to allocate support department costs using the reciprocal method. b.  Solve for the total cost to be allocated under...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs to operating departments using the step-down method. Operating data for these departments for last year are as follows: Service Departments Operating Departments Personnel Maintenance Assembly Machining Departmental costs $144,000 $84,000 $12,000 $34,000 Number of employees 35 30 90 60 Machine-hours 0 0 330 170 Personnel costs are allocated first on the basis of number of employees and Maintenance costs are allocated second on the...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs...
Andy Corp. has two service departments and two operating departments. The company allocates service departmental costs to operating departments using the step-down method. Operating data for these departments for last year are as follows: Service Departments Operating Departments Personnel Maintenance Assembly Machining Departmental costs $144,000 $84,000 $12,000 $34,000 Number of employees 35 30 90 60 Machine-hours 0 0 210 290 Personnel costs are allocated first on the basis of number of employees and Maintenance costs are allocated second on the...
Mushed’s String Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are...
Mushed’s String Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Support Departments Production Departments Maintenance Personnel A B Budgeted costs $320,000 $80,000 $160,000 $240,000 Budgeted maintenance-hours NA 200 240 160...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT