Tropics University offers only high-tech graduate level programs. Tropics has two main operating departments, Engineering and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Tropics University offers only high-tech graduate level programs. Tropics has two main operating departments, Engineering and Technology, and two support departments, Facility Maintenance (FM) and Computer Services (CS). The basis used to allocate Facility Maintenance is budgeted maintenance hours. The basis used to allocate Computer Services is budgeted processing hours. The Facility Maintenance budget is $350,000, while the Computer Services budget is $950,000. The following table summarises budgeted costs and usage by each department. Support Departments Operating Departments Engineering Technology FM CS Sales Budgeted costs FM supplied support - budgeted maintenance hours $350,000 $950,000 $3.5m $1.4m 1,000 2,000 5,000 CS supplied support - 2,000 24,000 36,000 budgeted processing hours Required: 1. Use the direct method to allocate support department costs to the operating departments. (3 marks) 2. Use the step-down method to allocate support department costs to operating departments. (5 marks) 3. Explain and justify which method you would recommend that Tropics University should use to allocate the cost of support departments to operating departments. (7 marks) Tropics University offers only high-tech graduate level programs. Tropics has two main operating departments, Engineering and Technology, and two support departments, Facility Maintenance (FM) and Computer Services (CS). The basis used to allocate Facility Maintenance is budgeted maintenance hours. The basis used to allocate Computer Services is budgeted processing hours. The Facility Maintenance budget is $350,000, while the Computer Services budget is $950,000. The following table summarises budgeted costs and usage by each department. Support Departments Operating Departments Engineering Technology FM CS Sales Budgeted costs FM supplied support - budgeted maintenance hours $350,000 $950,000 $3.5m $1.4m 1,000 2,000 5,000 CS supplied support - 2,000 24,000 36,000 budgeted processing hours Required: 1. Use the direct method to allocate support department costs to the operating departments. (3 marks) 2. Use the step-down method to allocate support department costs to operating departments. (5 marks) 3. Explain and justify which method you would recommend that Tropics University should use to allocate the cost of support departments to operating departments. (7 marks)
Expert Answer:
Answer rating: 100% (QA)
1 Support Departments Operating Departments FM CS Engineering Technology Sales Total Budg... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher
Posted Date:
Students also viewed these accounting questions
-
The department of management science at Tech offers four sections of introductory quantitative methods in the fall semester, each taught by a different teacher. A group of students have developed the...
-
Pole-Zero Doublets: In this problem we will be looking at the behavior of the circuits shown below in order to gain some intuition into the origin and response of pole-zero doublets. Zin Zin L 20 R...
-
The centralized computer technology department of Lee Company has expenses of $ 264,000. The department has provided a total of 2,500 hours of service for the period. The Retail Division has used...
-
Write a java program that will find the minimum value and print it to the console for the given array: {72, 101, 108, 108, 111, 32, 101, 118, 101, 114, 121, 111, 110, 101, 33, 32, 76, 111, 111, 107,...
-
1. Given the competition for job candidates on the Web, what elements would you recommend for an e-campaign that would make a job posting stand out? 2. Would you recommend Web-based recruiting to an...
-
The parameters of the transistors in Figure P10.88 are \(V_{T N}=0.6 \mathrm{~V}\), \(V_{T P}=-0.6 \mathrm{~V}, \quad k_{n}^{\prime}=100 \mu \mathrm{A} / \mathrm{V}^{2}, \quad k_{p}^{\prime}=60 \mu...
-
Liberty's inventory turnover during 2007 was a. 6 times b. 7 times c. 8 times d. Not determinable from the data given
-
A gold-mining firm is concerned about short-term volatility in its revenues. Gold currently sells for $300 an ounce, but the price is extremely volatile and could fall as low as $280 or rise as high...
-
You are the financial manager of Ferry Constructions, a small construction firm. The owners are concerned about their inventory management, where up until now, ordering of raw materials has been...
-
The Jackson independent School District began the year with the following accounts on its Balance Sheet related to property taxes (all amounts are in thousands of dollars). All accounts have normal...
-
In January 2014, the AZA Group had to decide definitively whether to undertake the construction of a hotel in the center of Valencia, for its subsequent rental or sale, or if it opted for other real...
-
Why are rates of return superior to dollar returns when comparing different potential investments?
-
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn. An inter v ivos trust is created by a will.
-
Consider the following information for a fish farm that has an infinite demand for fish produced at 5 per kg. a. Fill in all the blanks in the table. b. Verify that MRP L for the fish farm can be...
-
How do courts assess the fairness and feasibility of reorganization plans?
-
List the priority of claims for the distribution of a liquidated firms assets.
-
A firm's cost of equity is 12% and the average YTM for its outstanding bonds is 7.5%. The firm's long-term target capital structure is 70% equity and 30% debt. The marginal corporate income tax rate...
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
Consider the cost allocation system used at Sandia Custom Furniture and illustrated in Exhibit 6.9 . Required The system is referred to as a two-stage cost allocation system, because:a. There are two...
-
University Printers has two service departments, Maintenance and Personnel, and two operating departments, Printing and Developing. Management has decided to allocate maintenance costs on the basis...
-
KC Services provides landscaping services in Edison. Kate Chen, the owner, is concerned about the recent losses the company has incurred and is considering dropping its lawn services, which she feels...
-
Find the z-scores that bound the middle 70% of the area under the standard normal curve.
-
Find the z-scores that bound the middle 80% of the area under the standard normal curve.
-
Find the z-scores that bound the middle 98% of the area under the standard normal curve.
Study smarter with the SolutionInn App