Question
In: Accounting
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the...
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June:
| Service Departments | |||||||
| Maintenance | Utilities | ||||||
| Overhead costs incurred | $ | 486,000 | $ | 657,000 | |||
| Service provided to departments | |||||||
| Maintenance | — | 5 | % | ||||
| Utilities | 10 | % | — | ||||
| Producing—A | 20 | 40 | |||||
| Producing—B | 70 | 55 | |||||
| Totals | 100 | % | 100 | % | |||
Required:
What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3) the reciprocal method? (Round percentage calculations to 4 decimal places (e.g., 33.3333%), do not round intermediate calculations and round your final answers to the nearest dollar amount.)
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ekkarill92 answered 2 years agoRelated Solutions
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of Ju
Solexx Corporation allocates its service department overhead costs to producing departments. This information is for the month of June:
Service Departments Maintenance Utilities Overhead costs incurred $513,000 $ 708,000
Service provided to departments Maintenance 5% Utilities 10% Producing-A 20 40 Producing-B 70 55 Totals 100% 100%
Required: What is the amount of maintenance and utilities department costs distributed to producing departments A and B for June using (1) the direct method, (2) the step method (maintenance department first), and (3)...
45. The step method allocates costs of service departments to a. other service departments. b. producing departments....
45. The step method allocates
costs of service departments to
a.
other service departments.
b.
producing departments.
c.
joint products.
d.
other service departments and producing
departments.
46. What is the
firststep in allocating service department costs
to production departments?
a.
Assign overhead costs that are directly attributable to a
service or production department.
b.
Allocate other overhead costs based on appropriate cost
drivers.
c.
Allocate service department costs to production departments.
d.
None of the answers is correct.
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Basis
for allocation
Amount
Rent
Square feet of floor space
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$44,000
Administrative
Number of employees
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The following information is available for its three operating
(sales) departments:
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Square
Feet
Dollar
Sales
Number
of
employees
A
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13
B
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$321,000
15
C
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allocated by number of computer hours. Department costs, along with
the number of employees that worked during May and information
systems computer hours logged are provided below.
August Data
Human resources
Information systems
Refrigerators...
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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...
Waldorf Corporation had the following overhead costs for the previous year (Waldorf allocates overhead on the...
Waldorf Corporation had the following overhead costs for the
previous year (Waldorf allocates overhead on the basis of direct
labour hours):
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1st Quarter 7,000 $ 75,000
2nd Quarter 6,000 $ 74,000
3rd Quarter 8,000 $ 77,000
4th Quarter 7,500 $ 76,000
Assume that total overhead is comprised of Indirect materials
(a variable cost), Rent (a fixed cost) and Maintenance (a mixed
cost). The breakdown of these three costs at the 6,000 labour hour
level is as...
ABC Corporation has three service departments with the following costs and activity base: Service Department Cost...
ABC Corporation has three service departments with the
following costs and activity base:
Service Department
Cost
Activity Base for Allocation
Graphics Production
$200,000
# of copies
Accounting
$500,000
# of invoices processed
Personnel Department
$400,000
# of employees
ABC has three operating divisions, Micro, Macro and
Super. Their revenue, cost and activity information for December
31, 2017 are as follows:
Micro
Macro
Super
Direct Revenues
$700,000
$850,000
$650,000
Direct Operating Expenses
$50,000
$70,000
$100,000
# of copies made
20,000
30,000...
Interdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments...
Interdepartment Services: Step Method O'Brian's Department
Stores allocates the costs of the Personnel and Payroll departments
to three retail sales departments, Housewares, Clothing, and
Furniture. In addition to providing services to the operating
departments, Personnel and Payroll provide services to each other.
O'Brian's allocates Personnel Department costs on the basis of the
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gross payroll. Cost and allocation information for June is as
follows: Personnel Payroll Housewares Clothing Furniture Direct...
HSU Corporation has two service departments, Maintenance and Administration, and two producing departments A and B....
HSU Corporation has two service departments, Maintenance and
Administration, and two producing departments A and B.
The direct costs of each department for the last year is as
follows:
Administration $
80,000
Maintenance 60,000
Department
A 5,000
Department
B 20,000
Information on the proportion of services supplied and used
is:
User Departments
Administration
Maintenance
Dept. A
Dept. B
Administration
10%
60%
30%
Maintenance
30%
20%
50%
Using the reciprocal method of service department cost
allocation Administration costs allocated to Department B is:
a.
$24,000...
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