Question :
79.Teal Sports offers 2 different types of water sport activities—sailfish : 1302766
79.Teal Sports offers 2 different types of water sport activities—sailfish rental and banana boat rides. The company has two different activities—lifeguarding and maintenance—that provide input into its cost objectives. Data on estimated overhead for the year follows:
ActivityDriverEstimated
Overhead CostSailfish Rental EstimateBoat Rides Estimate
Lifeguarding# of Labor hours$63,9403,280 hours2,280 hours
MaintenanceHours of riding time$88,0001,500 hours2,500 hours
The company provides 2,400 banana boat rides and 1,200 sailfish rentals each year. How much overhead will be assigned to each banana boat ride?
A.$42.20
B$73.24
C$22.56
D.$33.84
80.The law firm of Barnes & Cohen purchased a new $17,600 copier. Copying costs will be shared by the purchasing, accounting, and information technology departments since those are the only departments that will have access to the machine. The company has decided to allocate the copying cost based on the number of copies made by each department. The sales person who sold the copier to the attorneys expects it will generate 1,000,000 copies. The manager of each department has estimated the number of copies that his or her department will make over the life of the copier:
DepartmentCopies
Purchasing 150,000
Accounting 450,000
Information Technology 200,000
How much overhead will be allocated each time a copy is made by the accounting department?
A.2.2 cents
B.3.9 cents
C.1.76 cents
D.None of these answer choices are correct.
81.Marley Music produces toy instruments—trumpet and flute— for children. Molding costs are allocated to products based on a percentage of material costs. Molding costs of $15,000 per month are budgeted and the store anticipates spending $30,000 in materials. By the end of the month, it was determined that actual molding costs were $14,500. If the company spends $6.50 per trumpet for materials, and $3.50 per flute for materials, how much of the molding costs will be allocated to each trumpet?
A.$0.50
B.$0.48
C.$3.14
D.$3.25
82.The law firm of Barnes & Cohen purchased a new $17,600 copier. Copying costs will be shared by the purchasing, accounting, and information technology departments since those are the only departments that will have access to the machine. The company has decided to allocate the copying cost based on the number of copies made by each department. The sales person who sold the copier to the attorneys expects it will generate 1,000,000 copies. The manager of each department has estimated the number of copies that his or her department will make over the life of the copier:
DepartmentCopies
Purchasing 150,000
Accounting 450,000
Information Technology 200,000
If the purchasing department makes 23,000 copies this quarter, how much copying cost will Barnes & Cohen allocate to purchasing?
A.$405
B.$2,699
C.$506
D.None of these answer choices are correct.
83.Ransom Widgets allocates the estimated cost of its accounting department, $200,000, to its production and sales departments since the accounting department supports these departments with regard to payroll and accounts payable functions. The accounting department costs will be allocated based on the number of employees using the direct method. Information regarding employees follows:
DepartmentEmployees
Accounting 4
Production 36
Sales 12
How much of the accounting department costs will be allocated to the production and sales departments, respectively?
ProductionSales
A. $150,000 $50,000
B. $180,000 $60,000
C. $1,800,000 $600,000
D. $22,222 $66,667
84.Intermodal Moving uses the direct method and allocates its maintenance costs on the basis of repair hours and its payroll department costs on the basis of employees. Estimated costs and information on the services and production departments follows:
Payroll$36,000
Maintenance$48,000
Packing30 employees, 280 repair hours
Driving10 employees, 1,960 repair hours
How much of the payroll and maintenance costs will be allocated to the packing department?
PayrollMaintenance
A. $900 $171.43
B. $27,000 $6,000
C. $27,000 $21.43
D. $1,200 $6,000
85.Freely Service provides residential and commercial monthly swimming pool cleaning services. Information on this service is as follows:
Service revenue $140,000
Direct materials 18,000
Direct labor 44,000
Estimated travel costs for the month total $2,340 and are allocated to each client based on miles driven to each pool cleaning. The company estimates it will clean 50 residential pools and 80 commercial pools per month with 1,200 total miles used for commercial pools and 2,400 total miles used for residential pools. Because commercial pools are much larger, they take 3 hours to clean, while residential pools take a half hour each. During the month, the actual mileage totaled 2,600 miles. How much is the rate at which travel costs will be allocated to residential pools?
A.$0.65
B.$0.975
C.$18.00
D.$8.83
86.The building maintenance department for Advantage Toys budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases:
Production Dept. AProduction Dept. B
Square footage 15,000 45,000
Direct labor hours 25,000 50,000
If Advantage assigns costs to departments based on square footage, how much maintenance cost will be allocated to Production Department A?
A.$1,400,000
B.$1,050,000
C.$1,575,000
D.$2,100,000
87.The building maintenance department for Advantage Toys budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases:
Production Dept. AProduction Dept. B
Square footage 15,000 45,000
Direct labor hours 25,000 50,000
If Advantage assigns costs to departments based on direct labor hours, how much maintenance cost will be allocated to Production Department B?
A.$1,400,000
B.$1,050,000
C.$2,800,000
D.$2,100,000
88.Sweet Cocoa produces chocolate syrup used by candy companies. Recently, the company has had excess capacity due to a foreign supplier entering its market. Sweet Cocoa is currently bidding on a potential order from Kilwin’s Candy for 5,000 cases of syrup. The estimated cost of each case is $27.50, as follows: direct material, $10; direct labor, $5; and manufacturing overhead, $12.50. The overhead rate of $2.50 per direct labor dollar is based on estimated annual overhead of $1,500,000 and estimated direct labor cost of $600,000, composed 40% of variable costs and 60% of fixed costs. The largest fixed cost relates to depreciation of plant and equipment. How much is the variable cost of producing a case of chocolate syrup?
A.$16.00
B.$27.50
C.$11.00
D.$20.00
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