Question
In: Accounting
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 basis of machine-hours. Q.: What is the total service department costs allocated to Machining Department?
Solutions
Expert Solution
· Requirement:
Total Service Department cost allocated to Machining Department = $
48000 + 62640 = $ 110,640
|
Personnel |
Maintenance |
Assembly |
Machining |
|
|
Service Department cost allocation: |
||||
|
Personnel (30 + 90+60 = 180) |
($144,000) |
$24,000 |
$72,000 |
$48,000 |
|
Maintenance ( 210 + 290 = 500) |
($108,000) |
$45,360 |
$62,640 |
|
|
Total Service Department cost allocated |
$117,360 |
$110,640 [Answer] |
--Working
|
Personnel |
Maintenance |
Assembly |
Machining |
|
|
Service Department cost allocation: |
||||
|
Personnel (30 + 90+60 = 180) |
-144000 |
=144000*30/180 |
=144000*90/180 |
=144000*60/180 |
|
Maintenance ( 210 + 290 = 500) |
=-84000-24000 |
=108000*210/500 |
=108000*290/500 |
ekkarill92 answered 2 years agoRelated Solutions
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...
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.
Stephanie Company
Stephanie...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
21
46
33
Transactions
35,000
–
18,000
72,000
Department
direct costs
$
361,000
$
142,000
$
950,000
$
3,680,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations follows:
Administration Accounting Domestic International Employees – 28 36
36 Transactions 38,000 – 20,000 80,000 Department direct costs $
363,000 $ 141,000 $ 955,000 $ 3,750,000
Allocate the cost of the service departments to the operating
departments using...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
58,000
$
24,500
$
159,750
$
597,000
BluStar estimates that the cost structure in its operations is as
follows....
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration Accounting Domestic
International
Employees – 30 40 30
Transactions 36,000 – 19,000 76,000
Dept direct costs $ 359,000 $ 146,000 $ 930,000
$ 3,720,000
Required:c. Allocate the cost of...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
29
49
22
Transactions
36,000
–
19,000
76,000
Department direct costs
$
357,000
$
147,000
$
945,000
$
3,650,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows:
Administration
Accounting
Domestic
International
Employees
–
26
49
25
Transactions
30,000
–
23,000
92,000
Department direct costs
$
351,000
$
146,000
$
945,000
$
3,680,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows.
Administration
Accounting
Domestic
International
Employees
–
28
51
21
Transactions
32,000
–
19,000
76,000
Department direct costs
$
358,000
$
149,000
$
935,000
$
3,560,000
Required:
a. Allocate the cost of the service departments
to the operating...
BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International....
BluStar Company has two service departments, Administration and
Accounting, and two operating departments, Domestic and
International. Administration costs are allocated on the basis of
employees, and Accounting costs are allocated on the basis of
number of transactions. A summary of BluStar operations
follows:
Administration
Accounting
Domestic
International
Employees
—
25
15
60
Transactions
50,000
—
10,000
40,000
Department direct costs
$
54,000
$
26,500
$
159,250
$
596,000
BluStar estimates that the cost structure in its operations is as
follows:...
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