Exam 12: Cost Allocation

A process map represents the flow of activities, resources, and their interrelationships.

_____ costs relate to more than one product and cannot be separately identified with an individual product.

Agua Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing.Maintenance costs are allocated Based on square footage while personnel costs are allocated based on number of Employees.The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs \ 50,400 \ 33,600 \ 42,000 \ 70,000 Square footage 1,600 800 3,200 2,400 Number of employees 16 24 48 64 If the step?down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Maintenance is _____.

Costs allocated as budgeted cost driver times total budgeted costs

Patti Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing.Maintenance costs are allocated based on square footage while personnel costs are allocated bsed on number of employees.The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs \ 126,000 \ 84,000 \ 105,000 \ 175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the direct method is used to allocate costs, the total cost of the Finishing Department after allocation would be _____.

Martin Company manufactures two models of pens, a standard and a deluxe model.Three activities have been identified as cost drivers and the related overhead costs $60,000) pooled together to arrive at the following information: Number of Number of Number of Product Setups Components DLH Standard 22 8 375 Deluxe 28 12 225 Costs per pool \ 15,000 \ 36,000 \ 9,000 If activity?based costing is used, the cost assigned to the standard model using the number of direct-labor hours would be _____.

Garfield Company processes copper ore into two products, C and U.The ore costs $5 per pound and conversion costs are $15 per pound.Garfield Company plans to produce 40,000 pounds of C and 20,000 pounds of U from 60,000 pounds of ore.C sells for $30 per pound and U sells for $40 per pound.Assuming the physical-units method of allocating joint costs, the amount of joint costs to product C would be _____.

There is no "best" cost allocation system.

Wilson Company has two departments, Arrive and Go.Relevant information is presented below: Arrive Go Budgeted Sales \ 400,000 \ 2,000,000 Actual Sales \ 300,000 \ 2,100,000 Total advertising expense is $300,000.If the allocation base is changed from budgeted sales to actual sales, the amount allocated to the Arrive Department will _____.

Corker Company manufactures three products from a joint process.Joint costs for the year amounted to $250,000.The following data are also available: Sales Value at Product Units Produced Split-off 5,000 \ 70,000 3,000 \ 30,000 2,000 \ 100,000 Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product X would be _____.

Point in a joint process where individual products are separately identifiable

The allocation of total departmental costs to the revenue?producing products or services

The cost of operating the Quality Control Department of Strongsville Manufacturing includes $850,000 of fixed costs and $550,000 of variable costs.The department normally budgets 20,000 inspection hours a year.Two departments, Fabrication and Assembly, receive quality control checks.Fabrication is budgeted at 1,000 hours a month, while Assembly is budgeted the remainder.In August, Fabrication used 1,200 inspection hours and Assembly used 900 hours. How much did each department receive in quality control costs, assuming a single rate is used based on budgeted hours?

Costs that are added to the production process before individual products are separately identifiable

Joint costs are incurred _____.

By-products normally have significant total sales values in comparison with other products emerging at the split-off point.

When allocating fixed costs, a predetermined lump-sum allocation based on budgeted usage should be used.

Eventually, all direct service department costs will become indirect production department costs.

Fudd Company manufactures three products from a joint process.Joint costs for the year amounted to $250,000.The following data are also available: Sales Value at Product Units Produced Split-off 5,000 \ 70,000 3,000 \ 30,000 2,000 \ 100,000 Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product Y would be _____.

_____ is a cost objective.