Question : 21) Using the step-down method, what amount of Data Center : 1211844

 

21) 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

 

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

 

22) 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

23) What is the complete reciprocated cost of the Plant Maintenance Department?

A) $393,750

B) $369,459

C) $365,000

D) $375,773

 

24) What is the complete reciprocated cost of the Data Processing Department?

A) $90,000

B) $118,750

C) $122,971

D) $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

 

25) 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

 

26) What is the complete reciprocated cost of the Maintenance Department?

A) $331,267

B) $326,667

C) $300,000

D) $0

P = $160,000 + (1,000/12,000) M

M = $300,000 + (10/60) P

M = $300,000 + (10/60) × [$160,000 +( 1,000/12,000) M]

M = $300,000 + $26,667 + (.013889) M

0.986111 M = $326,667

M = $331,267

27) What is the complete reciprocated cost of the Personnel Department?

A) $185,000

B) $187,606

C) $160,000

D) $210,000

 

28) Which of the following is an operating department?

A) machining

B) accounting

C) materials management

D) production control

 

29) Which of the following is one of the methods of allocating support department costs to operating departments?

A) dual-cost allocation method

B) incremental method

C) step-down method

D) single-rate cost allocation method

 

30) The cost-allocation method that allocates each support-department’s costs to operating departments only is the ________.

A) direct method

B) single-rate cost allocation method

C) step-down method

D) reciprocal method