Question

In: Accounting

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

$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

Solutions

Expert Solution

Answer is Option B

Answer is Option E

ekkarill92 answered 2 years ago
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