Question
In: Accounting
Burton Co. requests assistance allocating costs and determining the profitability of its two departments: Skis and...
Burton Co. requests assistance allocating costs and determining
the profitability of its two departments: Skis and Snowboards.
Shared indirect expenses include rent and supervision. Use the
Tableau Dashboard, with information from Burton’s December 31
year-end reports, for our analysis.
1. Allocate each of the indirect expenses (rent
and supervision) to the two departments: Skis and Snowboards.
2. Prepare departmental income statements for Skis
and Snowboards.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
P.F Steel Industries Co. uses the step method for allocating the costs of its service departments...
P.F Steel Industries Co. uses the step method for
allocating the costs of its service departments to operating
departments. The company has two support departments (Human
Resource and Information Technology) and two operating departments
(Hot Rolled Hollow Steel and Cold Rolled Hollow
Steel).
P.F. Industries Co. decided to allocate Human Resource
department costs based on the number of employees in each
department and Information Technology costs based on the number of
machine hours in each department.
Required:
a- Give a...
Dalton Co. follows a policy of allocating all common costs equally among its profit centers. A...
Dalton Co. follows a policy of allocating all common costs
equally among its profit centers. A partial responsibility income
statement for a typical month is shown below:
Dalton Co.
Profit Center 1
Profit Center 2
Profit Center 3
Responsibility margins
$
200,000
$
80,000
$
70,000
$
50,000
Common fixed costs
$
165,000
$
55,000
$
55,000
$
55,000
Income from operations
$
35,000
$
25,000
$
15,000
$
(5,000
)
After evaluating these data, Dalton Co. decides to close...
Berful Industries requests your assistance in preparing its accounting records for its annual audit, following US...
Berful Industries requests your assistance in preparing its
accounting records for its annual audit, following US GAAP. What
advice would you give them with respect to the following list of
accounting questions? Check or fill in the line:
Berful owns a mine with an estimated 200,000,000 tons of ore.
The cost of the ore is estimated to be $2.00 per ton, while the
cost of the land without the ore is calculated as $1,000,000. If
6,000,000 tons are mined and...
Berful Industries requests your assistance in preparing its accounting records for its annual audit, following US...
Berful Industries requests your assistance in preparing its
accounting records for its annual audit, following US GAAP. What
advice would you give them with respect to the following list of
accounting questions?
On the last day of the year, Berful borrowed $50,000 from a
bank, agreeing to pay the $50,000 principle amount of the loan and
$3,000 in interest on the last day of the next year—one year later.
Is the principle amount of the loan a liability on the...
The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for...
The Sendai Co., Ltd., of Japan has budgeted costs in its various
departments as follows for the coming year:
Factory Administration
$
766,800
Custodial Services
275,640
Personnel
38,300
Maintenance
55,860
Machining—overhead
922,200
Assembly—overhead
777,800
Total cost
$
2,836,600
The company allocates service department costs to other
departments in the order listed below.
Department
Number of
Employees
Total
Labor-
Hours
Square
Feet of
Space
Occupied
Direct
Labor-
Hours
Machine-
Hours
Factory Administration
28
—
14,200
—
—
Custodial Services
12
8,000...
The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for...
The Sendai Co., Ltd., of Japan has budgeted costs in its various
departments as follows for the coming year:
Factory Administration
$
819,840
Custodial Services
98,337
Personnel
26,358
Maintenance
170,555
Machining—overhead
1,126,484
Assembly—overhead
618,226
Total cost
$
2,859,800
The company allocates service department costs to other
departments in the order listed below.
Department
Number of
Employees
Total
Labor-
Hours
Square
Feet of
Space
Occupied
Direct
Labor-
Hours
Machine-
Hours
Factory Administration
30
—
5,300
—
—
Custodial Services
11
15,900...
The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for...
The Sendai Co., Ltd., of Japan has budgeted costs in its various
departments as follows for the coming year:
Factory Administration
$
1,063,750
Custodial Services
125,540
Personnel
39,520
Maintenance
155,140
Machining—overhead
969,100
Assembly—overhead
875,450
Total cost
$
3,228,500
The company allocates service department costs to other
departments in the order listed below.
Department
Number of
Employees
Total
Labor-
Hours
Square
Feet of
Space
Occupied
Direct
Labor-
Hours
Machine-
Hours
Factory Administration
27
—
11,700
—
—
Custodial Services
11
13,400...
Allocating Service Department Costs: Allocation Basis Alternatives Weld-Rite Fabricators has two producing departments, P1 and P2,...
Allocating Service Department Costs: Allocation Basis
Alternatives
Weld-Rite Fabricators has two producing departments, P1 and P2, and
one service department, S1.
Estimated directed overhead costs per month are as
follows:
P1
$450,000
P2
750,000
S1
273,000
Other data follow:
P1
P2
Numbers of employees
150
50
Production capacity (units)
100,000
60,000
Space occupied (square feet)
5,000
15,000
Five-year average of S1's service output used
65%
35%
For each of the following allocation bases, determine the total
estimated overhead cost for...
ABC Corporation makes skis in two departments: Department A makes the frame and Department B...
ABC Corporation makes skis in two departments: Department A
makes
the frame and
Department B adds the bindings and paints the skis. Monthly
capacities
are as follows:
Department A
Department B
Monthly
capacity
4,000 pairs of skis
5,000 pairs of skis
The company can
sell 5,000 pairs per month. A pair of skis sells for $500 and has
a
variable cost
of $250.
Required:
Assuming that ABC sells every pair it...
A transit district has asked for assistance in determining the proper fare for its bus system....
A transit district has asked for assistance in
determining the proper fare for its bus system. An effective annual
interest rate of 7% is to be used. The following additional
information was compiled.
Cost per bus
Bus life
Salvage Value
Miles driven per year 37,440
Number of passengers80,000
Operating cost $1.00 per mile in the first year,
increasing $0.10 per mile
after each year thereafter
$60,000 20 years $10,000
8. If the fare is to remain constant for the next...
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