The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (Click the icon to view the department overhead budgets.) Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly Total for support and operating departments $ $ 52,500 1,650 19,435 105 360 34,000 48,900 74,050 82,900 $ 156,950 Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: (Click the icon to view the data.) Department Building and grounds Personnelª Direct Manufacturing Number of General plant administration Cafeteria: operating loss Storeroom Machining Assembly Labor-Hours Employees Occupied 0 0 0 0 0 35 7,000 im 0 10 5,000 0 5 4,000 50 100 Total aBasis used is number of employees 12,000 16,000 Square Feet of Indirect Floor Space Manufacturing Labor-Hours 200 0 1,000 6,000 35,000 296,000 350,000 0 0 0 2,000 3,000 5,000 10,800 20,800 Number of Requisitions 0 0 0 0 0 3,000 1,000 4,000 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor-Hours Assembly Job 88 1 Job 89 5 21 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain. Machining 24 The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (Click the icon to view the department overhead budgets.) Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly Total for support and operating departments $ $ 52,500 1,650 19,435 105 360 34,000 48,900 74,050 82,900 $ 156,950 Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: (Click the icon to view the data.) Department Building and grounds Personnelª Direct Manufacturing Number of General plant administration Cafeteria: operating loss Storeroom Machining Assembly Labor-Hours Employees Occupied 0 0 0 0 0 35 7,000 im 0 10 5,000 0 5 4,000 50 100 Total aBasis used is number of employees 12,000 16,000 Square Feet of Indirect Floor Space Manufacturing Labor-Hours 200 0 1,000 6,000 35,000 296,000 350,000 0 0 0 2,000 3,000 5,000 10,800 20,800 Number of Requisitions 0 0 0 0 0 3,000 1,000 4,000 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor-Hours Assembly Job 88 1 Job 89 5 21 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain. Machining 24
Expert Answer:
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Posted Date:
Students also viewed these accounting questions
-
The Central Valley Company has prepared department overhead budgets for budgeted volume levels before allocations as follows: Support departments: Building and grounds...
-
The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Management has decided that the most appropriate inventory costs are...
-
The Eastern Summit Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Management has decided that the most appropriate inventory costs are...
-
Once an LLC has engaged in a dissolution procedure, the business does not stop immediately. True/False
-
How should sinking fund earnings be reported on the corporation income statement?
-
What are the pros and cons of consumer protection regulation?
-
Redesign the VOCs adsorber of Example 9.15 for a breakthrough time of \(4.0 \mathrm{~h}\). The pressure drop through the bed [calculated using the Ergun equation (2-95)] should not exceed \(1.0...
-
Bathworks produces hair and bath products. Bathworks owner would like to have an estimate of the companys net income in the coming year. Required Project Bathworkss net income next year by completing...
-
Let 1 f(z) = (2-1)(x-2) Find the Laurent expansion of f about z = 0 in the region {ze C: 1
-
Southeastern Foods has hired you to analyze their distribution-system design. The company has 11 distribution centers, with monthly volumes as listed below. Seven of these sites can support...
-
Think of a specific situation in which you were working with someone who was in a leadership position over you and that person was doing something that was wrong for you. Think of another specific...
-
Choose from any of the four short stories excerpted, and discuss why and how its themes should be considered relevant today. The most recent of these selections ("Cathedral") was published in 1981....
-
Beefsteak is a fast-casual restaurant concept from acclaimed Chef Jos Andrs that focuses on the "unsung power of vegetables" (Beefsteak Company Background Packet, n.d., page 7). Jos Andrs is a...
-
The watershed shown in the figure provided is approximately 150,000 acres in size. The locations of six rain gauges located in the vicinity of the watershed are shown in the figure. The long-term...
-
Explain HOW monetary policy works and Select an issue and brainstorm some questions that you would want to investigate which could be a focus of a blog. please give me a long and proper formed answer...
-
Any asset whose economic and social aspects are fixed in a formal property system (enforced private property rights) Question 2 options: provides for the smaller increases in productivity. is...
-
The current value of an S&R futures is $1000. You buy 50 futures on the S&R and the contract size is $500. The margin is settled on a weekly basis and the margin is 12.5% of the notional value....
-
Why is it necessary to study the diffusion of molecules in biological systems?
-
On May 1, 2014, Lowell Company began the manufacture of a new paging machine known as Dandy. The company installed a standard costing system to account for manufacturing costs. The standard costs for...
-
USA Airlines is a major airline carrier for both domestic and international travel. The company guarantees the lowest price ticket for travel within the United States. In order to get the lowest...
-
Seashore Healthcare operates two medical groups, one in Philadelphia and one in Baltimore. The semiannual bonus plan for each medical groups president has three components: Required a. Profitability...
-
If a competitive firm's cost increases due to an increase in the price of a factor of production or a tax, the firm's manager can quickly determine by how much to adjust output by calculating how the...
-
The Canadian metal chair manufacturing market has \(n=78\) firms. The estimated 8.1 elasticity of supply is \(\eta_{0}=3.1\), and the estimated elasticity of demand is \(=-1.1\). Assuming that the...
-
If the cost function for John's Shoe Repair is \(C(q)=100+10 q-q^{2}+\frac{1}{3} q^{3}\), and its marginal cost function is \(M C=10-2 q+q^{2}\), what is its profit-maximizing condition given that...
Study smarter with the SolutionInn App