In: Accounting
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 |
$475,000 |
$142,500 |
$171,000 |
Budgeted warehouse-hours |
NA |
250 |
1500 |
750 |
Number of computer hours |
2,500 |
NA |
22,500 |
25,000 |
Using the Reciprocal method, what amount of Data Center Department cost will be allocated to Department Music?
(Do not round any intermediary calculations.) PLEASE CHOOSE THE CLOSEST ANSWER.
A. |
$255,981 |
|
B. |
$231,106 |
|
C. |
$150,000 |
|
D. |
$298,705 |
|
E. |
$289,965 |
|
F. |
$245,500 |
|
G. |
$360,630 |
|
H. |
$275,600 |
Manufacturing, which uses the high-low method, makes a product called CUB. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 5,500 units per month. Per-unit costs at two different activity levels for each cost type are presented below.
type A | type B | type C | TOTAL | |
5000 units | $10 | $27 | $10 | $47 |
7,500 units | $10 | $18 | $9 | $37 |
If LONG produces 5,500 units, the total cost would be:
A. |
$298,000 |
|
B. |
$188,200 |
|
C. |
$193,500 |
|
D. |
some other amount |
|
E. |
$243,500 |
|
F. |
$282,200 |
|
G. |
$272,000 |
|
H. |
$187,000 |