13. The RAH Manufacturing Company has two service departments: Maintenance and A
ID: 2421939 • Letter: 1
Question
13. The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $320,000 are allocated on the basis of machine hours. The Accounting Department's costs of $140,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $320,000 and $520,000, respectively.
What is the Accounting Department's cost allocated to Department B using the direct method?
$64,615.
$75,385.
$59,231.
$2,692.
14. The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $320,000 are allocated on the basis of machine hours. The Accounting Department's costs of $140,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $320,000 and $520,000, respectively.
What is the cost of the Accounting Department's cost allocated to Department A using the step method and assuming the Maintenance Department's costs are allocated first?
$77,013.
$77,579.
$76,060.
$64,311.
15. Harry Dishman owns and operates Harry's Septic Service and Legal Advice. Harry's two revenue generating (production) operations are supported by two service departments: Clerical and Janitorial. Costs in the service departments are allocated in the following order using the designated allocation bases:
Clerical:
Variable cost: expected number of work orders processed
Fixed cost: long-run average number of work orders processed
Janitorial:
Variable cost: labor hours
Fixed cost: square footage of space occupied
Average and expected activity levels for next month (June) are as follows:
Expected costs in the service departments for June are as follows:
Under the direct method of allocation, what is the total amount of service cost allocated to the Legal Advice operation for June? (Round all calculations to the nearest whole dollar.)
$6,951.
$8,432.
$9,547.
$10,054.
16. The following information relates to Ray Corporation for the past accounting period.
Using the simultaneous solution method, Department B's cost allocated to Department C is
$46,195
$31,941
$32,895
$15,971
17. Lite Co. manufactures products X and Y from a joint process that also yields a by-product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional information is as follows:
Joint costs were allocated using the net realizable value method at the split-off point. The joint costs allocated to product X were
$81,000.
$106,800.
$162,000.
$177,722.
18. Boxes-2-Go has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,290,000. You have been provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Boxes-2-Go uses the single-rate method and allocates common costs based on the number of calls?
$14.30.
$11.44.
$26.00.
$19.28
19. Boxes-2-Go has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $1,725,000. You have been provided with the following information for the upcoming year:
The cost accountant determined $1,035,000 of the communication network's costs were fixed and should be allocated based on the number of calls. The remaining costs should be allocated based on the time on the network. What is the total communication network costs allocated to the Large Box Division, assuming the company uses dual-rates to allocate common costs?
$1,035,000.
$990,000.
$735,000.
$562,500.
20. The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department. The following budget has been prepared for the year.
If the Copy Department uses a dual rate for allocating its costs based on usage, how much cost will be allocated to the Marketing Department?
$189,000.
$378,000.
$525,000.
$210,000.
21. The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department. The following budget has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated to the Economics Department, assuming the Economics Department actually made 8,400,000 copies during the year?
$216,000.
$211,200.
$306,000.
$402,000.
22. The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department. The following budget has been prepared for the year.
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated to the Economics Department, assuming the Economics Department actually made 5,000,000 copies during the year?
$205,000.
$335,000.
$255,000.
$176,000.
23. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $3,456,000. You have been provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Fenway Telcom uses the single-rate method and allocates common costs based on the number of connections?
$72.00.
$27.00.
$90.00.
$18.00.
24. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $4,080,000. You have been provided with the following information for the upcoming year:
What is the allocation rate for the upcoming year, assuming Fenway Telcom uses the single-rate method and allocates common costs based on the time on the network?
$10.00.
$100.00.
$20.00.
$80.00.
25. Fenway Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $4,080,000. You have been provided with the following information for the upcoming year:
The cost accountant determined $2,937,600 of the server network's costs were fixed and should be allocated based on the number of connections. The remaining costs should be allocated based on the time on the network. What is the total server network costs allocated to the Commercial Division, assuming the company uses dual-rates to allocate common costs?
$1,264,800.
$962,880.
$734,400.
$204,000.
13. The RAH Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $320,000 are allocated on the basis of machine hours. The Accounting Department's costs of $140,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $320,000 and $520,000, respectively.
Explanation / Answer
25) Variable cost=Total-fixed
=4,080,000-2,937,600=$1,142,400
Commercial division=(40800/(40800+51000+112200)=.2
Cost=0.2*1,142,400=$2,937,600
Fixed cost =(51000)/(51000+68000+85000)=.25
Cost=.25*2937600=$734,400
Total=$2,937,600+$734,400=$962,880
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