Question

In: Accounting

The Buckaneer Clinic has two service departments (Human Resources and Information Resources) and two "production" departments...

The Buckaneer Clinic has two service departments (Human Resources and Information Resources) and two "production" departments (In-patient Treatment and Out-patient Treatment). The service departments service the "production" departments as well as each other, and studies have shown that Information Resources provides the greater amount of service. Which of the following allocations would occur if Buckaneer uses the direct method of cost allocation?

Multiple Choice

  • Information Resources cost would be allocated to In-patient Treatment.

  • Information Resources cost would be allocated to Human Resources.

  • Human Resources cost would be allocated to Information Resources.

  • In-patient Treatment cost would be allocated to Out-patient Treatment.

  • Out-patient Treatment cost would be allocated to Information Resources.

Solutions

Expert Solution

The Buckaneer Clinic has two service departments (Human Resources and Information Resources) and two "production" departments (In-patient Treatment and Out-patient Treatment). The service departments service the "production" departments as well as each other, and studies have shown that Information Resources provides the greater amount of service. Which of the following allocations would occur if Buckaneer uses the direct method of cost allocation?
Multiple Choice
Information Resources cost would be allocated to In-patient Treatment. Correct
Information Resources cost would be allocated to Human Resources. This would not occur using the direct method
Human Resources cost would be allocated to Information Resources. This would not occur using the direct method
In-patient Treatment cost would be allocated to Out-patient Treatment. This would not occur using the direct method
Out-patient Treatment cost would be allocated to Information Resources. This would not occur using the direct method

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The Hearts and Hands Clinic has two service departments (Human Resources and Information Systems) and two...
The Hearts and Hands Clinic has two service departments (Human Resources and Information Systems) and two "production" departments (In-patient Treatment and Out-patient Treatment). The service departments service the "production" departments as well as each other, and studies have shown that Information Systems provides the greater amount of service. Which of the following allocations would not occur if Hearts uses the step-down method of cost allocation? Select one: a. Human Resources cost would be allocated to In-patient Treatment. b. In-patient Treatment...
Bradford Company has two service departments, Human Resources and Janitorial, and two production departments, Cutting and...
Bradford Company has two service departments, Human Resources and Janitorial, and two production departments, Cutting and Glazing. The following data have been estimated for next year’s operations: Department: Direct Charges Number of Employees Square Footage Human Resources $360,000 6    15,000 Janitorial $280,000 8    20,000 Cutting $428,000 42    25,000 Glazing $562,000 40    35,000 Requirements: (1)   Distribute the service department costs using the sequential distribution method. Distribute the Human Resources Department first. (24 points/3 points each) (2) Prepare the journal entries to...
Paul Corp. is a retailing firm which has two service departments, Human resources and Information systems,...
Paul Corp. is a retailing firm which has two service departments, Human resources and Information systems, and two operating departments, Corporate sales and Consumer sales. The Human resources Department costs of $100,000 are allocated on the basis of number of employees. The Information systems Department costs of $150,000 are allocated based on the processing time. The costs of operating departments, Corporate sales and Consumer sales, are $528,000 and $222,000, respectively. Data on overhead costs, and information about the number of...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 40 % 0 15 % 45 % Administration 20 % 0 25 % 45 % 10 % Maintenance 0 30 % 0 15 % 55 % Direct cost $ 42,000 $ 248,550 $ 45,000 $ 230,000 $ 80,000 Required: Allocate...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 40 % 0 15 % 45 % Administration 20 % 0 25 % 45 % 10 % Maintenance 0 30 % 0 15 % 55 % Direct cost $ 42,000 $ 248,550 $ 45,000 $ 230,000 $ 80,000 Required: Allocate...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and...
Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 50 % 0 10 % 40 % Administration 10 % 0 20 % 50 % 20 % Maintenance 0 50 % 0 20 % 30 % Direct cost $ 24,000 $ 179,500 $ 25,000 $ 185,000 $ 50,000    Required:...
1.Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and...
1.Midland Resources has two production departments (Fabrication and Assembly) and three service departments (Engineering, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded: Supplying Department Using Department Engineering Administration Maintenance Fabrication Assembly Engineering 0 50 % 0 10 % 40 % Administration 10 % 0 20 % 50 % 20 % Maintenance 0 20 % 0 20 % 60 % Direct cost $ 22,000 $ 193,300 $ 25,000 $ 180,000 $ 50,000    Required:...
19) Christina Company has two service departments, Maintenance and Human Resources. Christina Company also has two...
19) Christina Company has two service departments, Maintenance and Human Resources. Christina Company also has two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees. The following information has been gathered for the current year:                                                                        Human                                          Maintenance         Resources              Mixing          Finishing Direct costs                                $50,400             $33,600              $42,000             $70,000 Square footage                              1,600                   800                 3,200                 2,400 Number of employees                       16                     24                     48                     64 Assume the step-down method is used to allocate service department costs and the Human Resources Department is allocated first. Then the...
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department....
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows:     User of Service Provider of Service HR Computing HR 0 25 % Computing 20 % 0 Deposit 70 % 65 % Loan 10 % 10 %    The budgeted costs in the...
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department....
Tuscaloosa National Bank has two service departments, the Human Resources (HR) Department and the Computing Department. The bank has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows:     User of Service Provider of Service HR Computing HR 0 10 % Computing 10 % 0 Deposit 60 % 50 % Loan 30 % 40 %    The budgeted costs in the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT