26. White Company has two service departments and two operating (production) dep

Question

26. White Company has two service departments and two operating (production) departments. The Payroll department services all three of the other departments in proportion to the number of employees in each. Also, the Maintenance Department services the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period;

Service Depts. Production Depts.
Payroll Maintenance Milling Assembly
Direct costs $20,400 $25,500 $76,500 $105,400
Number of personnel 15 15 45
Sq. ft. of space 10,000 15,000

The total cost of operating the Milling Department for the current period is:

21)A company%u2019s Inventory balance at 12/31/11 was $188,000 and was $200,000 at 12/31/10. Its Accounts Payable at 12/31/11 was $84,000 and was $80,000 at 12/31/10, and its cost of goods sold for 2011 was $720,000. This implies the company%u2019s total amount of cash payments for merchandise for 2011 equal:

40. The following present value factors are provided for use in this problem:

Present Value Present Value of an
Periods of 1 at 8% Annuity of 1 at 8%
1 0.9259 0.9259
2 0.8573 1.7833
3 0.7938 2.5771
4 0.7350 3.3121

Norman Co. wants to purchase a machine for $40,000, but needs to earn a 8% return. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. What is the machine%u2019s net present value (round to the nearest whole dollar)?

A. -
B. -
C. -
D. -
E. -

11.Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Explanation / Answer

Hi,

Please find the answers as follows:

Part A:

Allocation of Payroll to Other Departments:

Maintenance = 20400*15/75 = 4080

Milling = 20400*15/75 = 4080

Assembly = 20500*45/75 = 12300

Allocation of Maintenace to Milling = (25500 + 4080)*10000/25000 = 11832

Total Cost of Milling Department = 11832 (Maintenance) + 4080 (Payroll) + 76500 = 92412

Answer is 92412

Part B:

Cost of Goods Sold = Opening Stock + Purchases - Closing Stock

720000 = 200000 + Purchases - 188000

Purchases = 720000 + 188000 - 200000 = 708000

Cash Payment = 708000 + 80000 (Opening AP) - 84000 (Closing AP) = 704000

Answer is 704000

Part C:

NPV = -40000 + 12000*2.5771 + 16000*.7350 = 2685.20

Answer is 2685.20

Part D:

Office Expenses = 30000*1500/2500 + 20000*125000/200000 + 40000*475000/800000 = 54250

Thanks.

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