Question
In: Accounting
Zachary Trust Corporation has two service departments: actuary and economic analysis. Zachary also has three operating...
Zachary Trust Corporation has two service departments: actuary
and economic analysis. Zachary also has three operating
departments: annuity, fund management, and employee benefit
services. The annual costs of operating the service departments are
$668,200 for actuary and $1,002,300 for economic analysis. Zachary
uses the direct method to allocate service center costs to
operating departments. Other relevant data follow.
| Operating Costs* | Revenue | |||||
| Annuity | $ | 690,000 | $ | 681,000 | ||
| Fund management | 1,090,000 | 1,380,000 | ||||
| Employee benefit services | 790,000 | 1,280,000 | ||||
*The operating costs are measured before allocating service center costs.
Required
-
Use operating costs as the cost driver for allocating service center costs to operating departments.
-
Use revenue as the cost driver for allocating service center costs to operating departments.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Macy Manufacturing Corporation has two service departments, Custodial Services and Maintenance, and three production (operating) departments,...
Macy Manufacturing Corporation has two service departments,
Custodial Services and Maintenance, and three production
(operating) departments, Cutting, Milling, and Assembly. The
company allocates the cost of Custodial Services on the basis of
square footage and Maintenance on the basis of labor-hours. No
distinction is made between variable and fixed costs. Budgeted
operating data for the year just completed follow: Service
Departments Operating Departments Custodial Maintenance Cutting
Milling Assembly Budgeted costs before allocation $24,000 $12,000
$120,000 $75,000 $135,000 Square feet 2,000...
Arbon Company has three service departments and two operating departments. Selected data concerning the five departments...
Arbon Company has three service departments and two operating
departments. Selected data concerning the five departments are
presented below:
Service Departments
Operating Departments
Administrative
Janitorial
Equipment
Maintenance
Prep
Finishing
Total
Costs
$
92,000
$
67,800
$
36,000
$
256,100
$
498,600
$
950,500
Number of employees
80
60
240
600
300
1,280
Square metres of space occupied
300
1,200
1,000
2,000
7,000
11,500
Machine-hours
26,000
54,000
80,000
The company allocates service
department costs by the step-down method in the following...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$107,000
$341,060
$289,020
$455,900
$600,500
$545,800
$2,339,280
Meals served
2,800
6,000
3,000
80,000
91,800
Square feet of space
7,000
19,000
10,500
16,000
9,500
128,000
190,000
Files processed
24,000
17,000
45,000
86,000
The...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$93,000
$313,060
$261,020
$420,900
$544,500
$496,800
$2,129,280
Meals served
1,400
3,200
1,600
71,600
77,800
Square feet of space
5,600
14,800
7,700
11,800
8,100
114,000
162,000
Files processed
17,000
10,000
31,000
58,000
The...
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for...
Woodbury Hospital has three service departments and three
operating departments. Estimated cost and operating data for all
departments in the hospital for the forthcoming quarter are
presented in the table below:
Service Departments
Operating Departments
Housekeeping Services
Food Services
Administrative Services
Laboratory
Radiology
General Hospital
Total
Total cost
$105,000
$337,060
$285,020
$450,900
$592,500
$538,800
$2,309,280
Meals served
2,600
5,600
2,800
78,800
89,800
Square feet of space
6,800
18,400
10,100
15,400
9,300
126,000
186,000
Files processed
23,000
16,000
43,000
82,000
The...
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a...
The Ferre Publishing Company has three service departments and
two operating departments. Selected data from a recent period on
the five departments follow:
Service Departments
Operating Departments
Administration
Janitorial
Maintenance
Binding
Printing
Total
Costs
$72,000
$73,000
$44,000
$245,000
$545,000
$979,000
Number of employees
112
80
320
800
400
1,712
Square feet of space
occupied
3,000
12,000
10,000
20,000
70,000
115,000
Hours of press time
18,000
37,000
55,000
The company allocates service department costs by the step-down
method in the following...
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a...
The Ferre Publishing Company has three service departments and
two operating departments. Selected data from a recent period on
the five departments follow:
Service Departments
Operating
Departments
Administrative
Janitorial
Maintenance
Binding
Printing
Total
Costs
$93,300
$66,200
$44,800
$248,300
$490,600
$943,200
Number of employees
60
90
260
630
320
1,360
Square feet of space occupied
3,100
11,800
8,800
10,400
68,900
103,000
Hours of press time
9,600
28,200
37,800
Required:
Assuming that the company uses the direct method rather than the
step-down...
Bens Corporation has three service departments (Repairs, HR, and IT) and two production departments (M1 and...
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
M1
M2
Repairs
—
0
%
0
%
40
%
60
%
HR
10
%
—
20
%
35
%
35
%
IT
0
%
10
%
—
20
%
70
%
The direct costs of the service departments in the previous
period were $24,000...
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...
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