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Alik [6]
3 years ago
14

Lewis Corporation has two service departments: Data Processing and Administration/Personnel. The company also has three division

s: X, Y, and Z. Data Processing costs are allocated based on hours of use and Administration/Personnel costs are allocated based on number of employees. Department Direct Costs Employees Hours of use Administration/ Personnel $400,000 10 3,300 Data Processing 850,000 5 1,100 X 450,000 30 1,800 Y 300,000 15 2,200 Z 550,000 25 4,500 Assume that Data Processing provides more service than Administration/Personnel. Refer to Lewis Corporation. Assume that Data Processing costs have been allocated and the balance in Administration is $600,000. Using the step method, what amount is allocated to Y
Business
1 answer:
scZoUnD [109]3 years ago
3 0

Answer:

Lewis Corporation

Using the step method, the amount allocated to Y is:

Y =  $128,571

Explanation:

a) Data and Calculations:

Department      Direct Costs   Employees     Hours of use

Administration/            

Personnel         $400,000                10                3,300

Data Processing 850,000                 5                 1,100

X                         450,000                30                1,800

Y                         300,000                 15               2,200

Z                         550,000                25               4,500

Allocation of Administration/

 Personnel cost of $600,000:

X = $257,143 (600,000 * 30/70)

Y =  $128,571 (600,000 * 15/70)

Z = $214,286 (600,000 * 25/70)

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Direct Method, Reciprocal Method, Overhead Rates Macalister Corporation is developing departmental overhead rates based on direc
jeka94

Answer:

Answer is given below.

If you face difficulty in understating the answer, see attached file.

Explanation:

       

 Molding Assembly    

       

Employee A 19 75    

Hours B 2180 2180    

Toal Labor Hours A*B 41420 163500    

       

       

       

 Engineering Gen Factory Molding Assembly Total  

Budgeted Overheads  $       206,000 $       395,000 $       198,000 $         73,000 $872,000  

       

Engineering Hours   2100 2400 7600 $   12,100  

Square Feet  95850  447300 95850 $639,000  

       

Weights for Direct Method        

Engineering Hours    24.00% 76.00%  

Square Feet    82.35% 17.65%  

       

Weightes for reciperocal        

Engineering Hours%   17.36% 19.83% 62.81%  

Square Feet%  15.00%  70.00% 15.00%  

       

1. Direct Method Allocation:        

       

 Engineering Gen Factory Molding Assembly Total  

Budgeted Overheads  $       206,000 $       395,000 $       198,000 $         73,000 $872,000  

Engineering  $     -206,000  $         49,440 $       156,560 $            -    

Gen Factory   $     -395,000 $       325,294 $         69,706 $            -    

       

Total Overhead a   $       572,734 $       299,266  

Direct Labor Hours b   41420 163500  

Overhead Per DLH a/b   $            13.83 $              1.83  

       

1. Reciperocal Method Allocation:        

       

       

Engineering 206000+0.15Gen Factory      

Gen Factory 395000+0.1736Engineering      

       

Engineering 206000+0.15(395000+0.1736Engineering)      

       

Engineering 206000+59250+0.02604Engineering      

       

0.97396 Engineering 265250      

Engineering $                                    272,342      

       

Gen Factory 395000+0.1736Engineering      

Gen Factory 395000+(0.1736*272342)      

Gen Factory $                                    442,264 R/Off Gap      

       

 Engineering Gen Factory Molding Assembly Total  

Budgeted Overheads  $       206,000 $       395,000 $       198,000 $         73,000 $872,000  

Engineering  $     -272,342 $         47,266 $         54,018 $       171,058 $            -    

Gen Factory  $         66,340 $     -442,264 $       309,585 $         66,340 $            -    

       

Total Overhead a   $       561,603 $       310,397  

Direct Labor Hours b   41420 163500  

Overhead Per DLH a/b   $            13.56 $              1.90  

       

Part -3        

       

The major advantage of reciprocal method is that it fully takes into account the interdepartmental services        

and is therefore considered a more accurate method than direct and step method for departmental cost allocation.        

       

Download xlsx
5 0
2 years ago
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $6 per
kupik [55]

Answer:

$192,000

Explanation:

Calculation for What is the value of ending inventory under variable costing

Using this formula

Value of ending inventory =[(Direct materials+Direct labor+Variable overhead+(Fixed overhead/Units produced)×Ending units in inventory]

Let plug in the formula

Value of ending inventory=[($6+ $4+ $5 + ($234,000/26,000 units) ×8,000 units]

Value of ending inventory= ($15 units+$9 units)×8,000 units

Value of ending inventory=$24 per units×8,000 units

Value of ending inventory = $192,000

Therefore the value of ending inventory under variable costing will be $192,000

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2 years ago
For the questions below, select the appropriate answer.
anastassius [24]

Answer:

Explanation:

Are households primarily buyers or sellers in the goods and services market?

A. Buyers

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Are households primarily buyers or sellers in the labor market?

B. Sellers

- Households are sellers in the labor market. They sell their services in exchange for wages

Are firms primarily buyers or sellers in the in the labor market

A. Buyers

Firms are buyers in the labor market. They buy the services of households

Are firms primarily buyers or sellers in the goods and services market?

B. Sellers

Firms are sellers in the goods and services market. They sell their finished goods and services

7 0
3 years ago
Excess cash is cash that is excess to the operations of a company and is considered "negative debt" because the cash could be us
Harrizon [31]

Answer:

True

Explanation:

Excess cash is a term used in the for the residual cash flow of operation. It is calculated after adding the non cash expenses in the net income of the company and deducting all the capital expenditures. This is the cash balance which is available for the reinvestment purpose and for distribution to the stockholders. This cash can also be used to reduce the gearing of the company and there is a cost attached to it if used for payment of loan, which is the rate or return from the reinvestment of these cash flows.

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iVinArrow [24]

Answer:

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The management process has the following stages:

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4. Apply and implement the strategy.

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3 years ago
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