Question : 41) Marshall University offers only high-tech graduate-level programs. Marshall has : 1211846

 

41) Marshall University offers only high-tech graduate-level programs. Marshall has two principal operating departments, Commerce and Social Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credit hours for a department. The Facility and Technology Maintenance budget is $500,000, while the Enrollment Services budget is $900,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:

 

 

Services Provided: (Annually)

 

Budget

Commerce

Social Sciences

F&T Maintenance

Enrollment Service

F&T Maintenance

(in hours)

$500,000

3,000

6,000

Zero

5,000

Enrollment Service

(in credit hrs)

$900,000

25,000

35,000

2,000

Zero

 

Required:

Prepare a schedule which allocates service department costs using the step-down method with the sequence of allocation based on the highest-percentage support concept. Compute the total amount of support costs allocated to each of the two principal operating departments, Commerce and Social Sciences.

 

42) Gotham University offers only high-tech graduate-level programs. Gotham has two principal operating departments, Engineering and Computer Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credit hours for a department. The Facility and Technology Maintenance budget is $350,000, while the Enrollment Services budget is $950,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:

 

 

Services Provided: (Annually)

 

Budget

Engineering

Computer Sciences

F&T Maintenance

Enrollment Service

Engineering

$3,500,000

 

 

 

 

Computer Sciences

$1,400,000

 

 

 

 

F&T Maintenance

(in hours)

$350,000

2,000

1,000

Zero

5,000

Enrollment Service

(in credit hrs)

$950,000

24,000

36,000

2,000

Zero

 

Required:

a.Set up algebraic equations in linear equation form for each activity.

b.Determine total costs for each department by solving the equations from part (a) using the reciprocal method.

(Engineering= Eng; Computer Sciences = CS; Facility and Technical Maintenance = FTM; Enrollment Service = ES)

43) Craylon Corp has two service departments, S1 and S2, and two production departments, P1 and P2.

 

The data for April were as follows:

 

 

 

Services provided to:

Activity

Costs

S1

S2

P1

P2

S1

$100,000

 

20%

40%

50%

S2

$80,000

10%

 

55%

25%

 

Fixed Costs

 

 

 

 

P1

$400,000

 

 

 

 

P2

$500,000

 

 

 

 

 

Required:

a.Set up algebraic equations in linear form for each activity.

b.Determine total costs for each department by solving the equations from part (a) using the reciprocal method.

44) Describe methods which may be used to allocate support costs within organizations containing multiple support departments. Discuss advantages and disadvantages of the various methods.

 

 

 

 

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