Question :
Answer the following questions using the information below:
Goldfarb’s Book and : 1216999
Answer the following questions using the information below:
Goldfarb’s Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $150,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $250,000 and $300,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:
Support Departments
Production Departments
Warehouse Department
Data Center Department
Music
Books
Budgeted costs
$350,000
$150,000
$125,000
$150,000
Budgeted warehouse-hours
NA
500
1,000
1,500
Number of computer hours
200
NA
800
1,000
16) Using the direct method, what amount of Warehouse Department costs will be allocated to Department Books?
A) $140,000
B) $210,000
C) $150,000
D) $175,000
17) Using the direct method, what amount of Data Center Department costs will be allocated to Department Music?
A) $150,000
B) $66,667
C) $83,333
D) $60,000
18) Using the step-down method, what amount of Data Center Department cost will be allocated to the Warehouse Department if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
A) $50,000
B) $150,000
C) $15,000
D) $0
19) Using the step-down method, what amount of Warehouse Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
A) $233,333
B) $116,667
C) $243,333
D) $121,667
20) Using the step-down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)
A) $117,342
B) $66,667
C) $92,592
D) $83,333
C) Warehouse provided to Data Center: 500 / (500 + 1,000 + 1,500) = .167
Data Center provided to Warehouse: 200 / (200 + 800 + 1,000) = .100
Warehouse provides the greatest amount of service to support departments, so it is allocated first.
Data Center gets costs from Warehouse = .167 × ($350,000) = $58,333
Data Center total costs are now = $150,000 + $58,333 = $208,333
Allocation of Data Center to Music = (800/(800+1,000))× $208,333 = $92,592
Answer the following questions using the information below:
Alfred, 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
Services furnished:
By Plant Maintenance (budgeted labor-hours):
to Data Processing3,500
to Machining5,000
to Capping8,200
By Data Processing (budgeted computer time):
to Plant Maintenance600
to Machining3,500
to Capping600
21) Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department?
A) DP= $75,000 + (600/4,700) PM
B) DP= $75,000 + (3,500/16,700) PM
C) DP= $75,000 × (600/4,700) + $350,000 × (3,340/16,700)
D) DP= $350,000 + (600/16,700) DP
22) What is the complete reciprocated cost of the Plant Maintenance Department?
A) $393,750
B) $369,459
C) $365,000
D) $375,773
PM= $350,000 + (600/4,700) DP
PM= $350,000 + (600/4,700) × [$75,000 + (3,500/16,700) PM]
PM= $350,000 + $9,574 + (0.026755)PM
0.973245 PM = $359,574
PM= $369,459
23) What is the complete reciprocated cost of the Data Processing Department?
A) $90,000
B) $118,750
C) $122,971
D) $152,432
PM= $350,000 + (600/4,700) DP
PM= $350,000 + (600/4,700) × [$75,000 + (3,500/16,700) PM]
PM= $350,000 + $9,574 + (0.026755)PM
0.973245 PM = $359,574
PM= $369,459
PM= $369,459; DP = $75,000 + (3,500/16,700) PM
DP= $75,000 + (3,500/16,700) $369,459 = $152,432
Answer the following questions using the information below:
Hugo, owner of Automated Fabric, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:
Budgeted manufacturing overhead costs:
MaintenanceM (Support Dept)$300,000
PersonnelP (Support Dept)$ 160,000
WeavingW (Weaving Dept)$650,000
ColorizingC (Colorizing Dept)$350,000
Services furnished:
By Maintenance (budgeted labor-hours):
to Personnel1,000
to Weaving7,000
to Colorizing4,000
By Personnel (Number of employees serviced):
Plant Maintenance10
Weaving30
Colorizing20
24) Which of the following linear equations represents the complete reciprocated cost of the Personnel Department?
A) P= $300,000 – $160,000 (1,000/12,000) M
B) P= (1,000/12,000) M
C) P= $160,000 + (1,000/12,000) M
D) P= $160,000
25) What is the complete reciprocated cost of the Maintenance Department?
A) $331,267
B) $326,667
C) $300,000
D) $0
