Support Department Cost Allocation—Reciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $257,000. The total cost of the Cafeteria Department is $631,000. The number of employees and the square footage in each department are as follows:

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Saddleback Company makes camping lanterns using a single production process. All direct materials are added at the beginning of the manufacturing process. Information for the month of March follows:

rev: 02_04_2020_QC_CS-198908

Required:

1. Using the weighted-average method of process costing, complete each of the following steps:

a. Reconcile the number of physical units worked on during the period.

b. Calculate the number of equivalent units.

c. Calculate the cost per equivalent unit.

d. Reconcile the total cost of work in process.

Support Department Cost Allocation—Reciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $261,000. The total cost of the Cafeteria Department is $397,000. The number of employees and the square footage in each department are as follows:

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Support Department Cost Allocation—Reciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $240,000. The total cost of the Cafeteria Department is $898,000. The number of employees and the square footage in each department are as follows:

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Cost of Goods Manufactured, using Variable Costing and Absorption Costing

On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 2,400 units and sold 2,100 units. The following income statement was prepared, based on the variable costing concept:

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Q3)

Airspace, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 60 range instruments and 400 pressure gauges were produced, and overhead costs of 101,600 OMR were estimated. An analysis of estimated overhead costs reveals the following activities.

The cost driver volume for each product was as follows.

1. Determine the overhead rate for each activity.

2. Assign the manufacturing overhead costs for April to the two products using activity-based costing.

Write a memorandum to the president of Air United explaining the benefits of activity-based costing

Multiple-Product Break-even, Break-Even Sales Revenue

Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows:

Total fixed cost is $94,500.

Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $17 and a variable cost per unit of $10. Total fixed cost must be increased by $31,500 (making total fixed cost $126,000). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Item1 Time Remaining 32 minutes 9 seconds 00:32:09 Item Skipped Item 1 Item 1 Item Skipped Time Remaining 32 minutes 9 seconds 00:32:09 Kozlov Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 1,106,280 84,000 machine hours Processing orders $ 140,650 2,900 orders Inspection $ 203,524 2,920 inspection hours The company makes 500 units of product A21W a year, requiring a total of 885 machine-hours, 50 orders, and 20 inspection-hours per year. The product's direct materials cost is $36.04 per unit and its direct labor cost is $30.04 per unit. According to the activity-based costing system, the average cost of product A21W is closest to: