FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Support Department Costing

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Dickson Company has two production departments and two support departments. Each department occupies the following square footage: Support department costs are allocated on the basis of the square footage of space. If the administration costs are $67,000 and housekeeping costs are $45,000, what amount would be allocated to the accounting department if the company uses the step method?

A) $26,870.
B) $29,130.
C) $53,739.
D) $56,000.

E) A) and C)
F) B) and D)

Correct Answer

verified

Show Answer

Question 42

Essay

Review LaterAdd Note

Review Later

Hruska Tax Consulting provides several services. A married couple can get their tax return prepared for $220. A child's tax return, under the age of 18, is prepared for $50. To have the tax returns e-filed will cost an additional $40 per tax return. Hruska provides a bundle to its clients. The parents can get their tax return prepared, with one child and two e-file fees for $300. Use the stand-alone method to allocate the transaction price to the separate services. (Do not round intermediary calculations, round your final answer to the nearest whole dollar)

Correct Answer

verified

Total separate costs = $220 + $50 + $40 ...

View Answer

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

An example of support departments includes all of the following except

Expo manufacturing has two production departments and two support departments. The number of employees for each department is as follows: Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. How much in total support costs would be allocated to machining, using the step method?

Support department costs are applied to product costs as

Which of the following statements best explains the significant difference between the step method and the reciprocal method?

As a sole proprietor, you constructed another small building for a home office on your property. Your lot is 80 ft x 80 ft, and the new building takes up 20 ft x 20 ft of the lot. Your property taxes were $2,800 prior to the construction of the building. This year, property taxes went up to $3,600 to account for the addition. You'd like to allocate your property taxes so the business portion can be deducted on your annual tax return. Using the stand-alone method to allocate the common costs, what is your personal share and what amount can be deducted on your annual tax return as a business expense? (Do not round intermediary calculations, round your final answer to the nearest whole dollar)

Eagle Distributing has three operating units and three support departments. Clint, the company manager, is trying to analyze the profitability of the three operating units. Clint has narrowed it down to using the step method of allocating costs. First, however, he is trying to figure out the best way to rank the support departments. Information for the company follows: Instructions: a.Allocate the support department costs to the operating units using the step method of allocating costs if the departments are ranked based on the highest costs. b.Allocate the support department costs to the operating units using the step method of allocating costs if the support departments are ranked based on the percentage of services they provide to other support departments c.Revenue earned by the shipping, packing, and receiving operating units was $960,000, $1,300,000, and $620,000, respectively. Compute the gross margin, operating income, gross margin percentage, and profit margin percentage using the information calculated in parts (a) and (b). (round your percentages to the nearest whole percent)

below, name an appropriate cost allocation base: -Company cafeteria cost

When allocating common costs, which method allocates the cost based on the percentage paid?

Burger Queen offers a lunch meal deal for its customers. The customer will get a burger, fry, soft drink, and ice cream for $5. If the customer were to buy each item individually, the cost would be broken down as follows: Using the incremental cost allocation, how must of the transaction price should be allocated to the burger? (do not round intermediary calculations)

Credit Management Solutions provides two types of credit reports: Individual and Business. They vary based on the amount of background information and data collection required. The Business reports use more skilled personnel because of the additional information that needs to be verified. Total support services costs to be allocated are $960,000. The following information is also provided: For each potential allocation base, determine the support department cost allocated to each type of report using the direct method. (Do not round intermediary calculations, round your final answer to the nearest whole dollar)

Which support department costs would most likely allocate its costs based on square footage?

Using the direct method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments. The total amount of costs allocated to Machining from the Custodial Department and Accounting Department is

What type of costs would support department costs be classified as?

A common cost occurs when

Expo manufacturing has two production departments and two support departments. The number of employees for each department is as follows: Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. What amount of human resource costs would be allocated to machining, using the step method?

All of the following would be considered a support department in a manufacturing company except

Dickson Company has two production departments and two support departments. Each department occupies the following square footage: Housekeeping department costs are allocated on the basis of the square footage of space. If the budget for housekeeping costs is $45,000, what amount would be allocated to Administration using the direct method to allocate costs?

Currently, Fire Station 51 and Fire Station 81 operate separate EMS trucks. Station 51 has operating costs of $46,000 per year. Station 81 reports operating cost of $42,000 per year. Station 51 utilizes its truck about 65% of the time, and Station 81 has an operating efficiency of about 40%. The fire stations are trying to determine the benefits of only operating one EMS truck that they will share. Based on the extended needs, the newer EMS truck will cost $80,000. How much of the new EMS truck should be allocated to each fire station using the stand-alone cost allocation?