Question : 51) ______ A) create special accounting records for the support department. B) not : 1196098

 

51)

______ A)

create special accounting records for the support department. B)

not allocate any costs of the support departments. C)

allocate costs based on user department usage. D)

expense fixed costs of support departments directly to the income statement. E)

allocate a fixed amount to each department regardless of use.

52)

Which of the following departments is NOT a support department for a boat manufacturing company? 52)

______ A)

purchasing B)

moulding and assembly C)

personnel D)

data processing E)

accounting

53)

Which of the following is FALSE concerning the way in which different organizations treat support departments? 53)

______ A)

All companies only allocate indirect costs for a support department. B)

Organizations differ in how they define operating departments and support departments. C)

Some departments which are located at headquarters in one organization, may be located at the divisional level in another corporation. D)

More accurate support department costs result in more accurate product costs. E)

Organizations differ in the percentage of total support costs allocated.

Use the information below to answer the following question(s).

 

Joe’s Tire Company has two service departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.

 

Data on standard service hours and number of employees are as follows:

 

MaintenancePersonnelProduction Depts.

Dept.        Dept.        A        B

Standard service hRs used200200240160

Number of employees102040120

54)

How much of the cost of the Maintenance Department is allocated to Department B using the direct method? 54)

______ A)

$32,000 B)

$24,000 C)

$48,000 D)

$39,000 E)

$8,000

55)

How much of the cost of the Personnel Department is allocated to Department B using the direct method? 55)

______ A)

$39,000 B)

$15,000 C)

$8,000 D)

$48,000 E)

$32,000

56)

What is the cost of the Maintenance Department allocated to Department B using the step-down method if the service department with the highest percentage of interdepartmental service is allocated first? 56)

______ A)

$28,667 B)

$32,000 C)

$21,333 D)

$48,000 E)

$16,000

57)

Which method allocates costs by explicitly including the mutual services rendered among all support departments? 57)

______ A)

the reciprocal allocation method B)

the interdepartmental method C)

the step-down method D)

the direct allocation method E)

the step-down allocation method

58)

Which of the following describes the complete reciprocated cost? 58)

______ A)

It only includes the actual incurred cost of the operations department. B)

It is always less than actual cost. C)

It only includes the actual incurred cost of the support department. D)

It is always larger than actual cost. E)

It is equal to the actual cost of a single service department.

Use the information below to answer the following question(s).

 

John, owner of Hi-Tech Fiberglass Fabricators Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis.

 

Budgeted manufacturing overhead costs

 

Plant MaintenancePM (Support Dept.)$350,000

Data ProcessingDP (Support Dept.)$

75,000

MachiningM (Operating Dept.)$225,000

CappingC (Operating Dept.)$125,000

 

Service furnished:

 

By Plant Maintenance (budgeted labour hours)

Data Processing3,500

Machining5,000

Capping8,200

 

By Data Processing (budgeted computer time)

Plant Maintenance600

Machining3,500

Capping600

59)

Which of the following linear equations would represent the complete reciprocated cost of the Data Processing department? 59)

______ A)

DP = $75,000 + (3,500/16,700)PM B)

DP = $75,000 + (600/4,800)PM C)

PM = $350,000 + (600/16,700)DP D)

PM =$75,000 x (600/4,800) + $350,000 x (3,340/16,700) E)

DP = $75,000 x (600/4,800) + $350,000 x (3,340/16,700)

60)

What is the complete reciprocated cost of the Data Processing and the Plant Maintenance, respectively? 60)

______ A)

$152,432 and $369,459 B)

$90,000 and $393,750 C)

$118,750 and $365,000 D)

$152,432 and $375,773 E)

$122,971 and $375,773