Exam 9: Allocating Service Department Costs and Responsibility Accounting

Cool Surfboards has two departments that both use a conference room (shared facilities). Total monthly conference room cost is $1,000. The Wave Blaster department has 15 employees that reserved 60 hours of conference room time. The Boogie Break department has 5 employees that reserved 100 hours of conference room time. If Cool Surfboards allocates shared facilities cost based on number of employees, what is the amount of share facilities costs allocated to the Boogie Break department?

City Inspections has three departments using the services of the Legal Department. Total monthly shared legal department cost is $18,000. The Annual inspections department has 5 employees that used 100 hours of legal services. The Emergency services department has 8 employees that used 200 hours of legal services. The Roads department has 7 employees that used 300 hours of legal services. -If City Inspections allocates shared legal costs number of employees as the allocation base, how much of the legal costs will be allocated to the Roads department?

Bright College is a community college located in Bright, CA. It provides instruction in five areas: Art, Business, Computer Science, Graphic Design, and Nursing. The college shares copy services with a total monthly cost of $15,000. The college is considering allocating costs using either number of copies or operating income as its allocation base. Data for the month of September, 2012 follows: - If Bright College uses number of copies as the allocation cost base, how much copy costs would be allocated to the Nursing Division?

Trips to Remember, Inc. provides vacation trips to various locations around the world. The company's headquarters are located in Meadows Place, TX. The headquarters provide two main services to the four tourist locales: accounting and customer services (reservations). Budget and actual data for each of the four tourist locations are as follows: - The Accounting Services Department actually incurred $11,000 in accounting costs for May 2012. The Reservation Department incurred $23,000 in actual costs, of which $20,000 were traceable to the locations. What is the amount of customer service (reservation) costs allocated to the Huntsville location, assuming customer service costs are allocated based on the number of calls at each location?

City Inspections has three departments using the services of the Payroll Department. Total monthly payroll shared cost is $10,000. The Annual inspections department has 5 employees that make 20 requests. The Emergency services department has 8 employees that make 50 requests. The Roads department has 7 employees that make 30 requests. If City Inspections allocates shared payroll costs using number of employees as the allocation base, how much of the payroll costs will be allocated to the Roads department?

Cool Surfboards has two departments that both use the services of a department. The Wave Blaster department has 15 employees that reserved 60 hours of conference room time. The Boogie Break department has 5 employees that reserved 100 hours of conference room time. Which of the following is TRUE?

Shoppers paradise, a wholesaler, ships various products worldwide. Some shipments are made to an individual customer and some are made on bulk orders that are mailed to multiple addresses. The company is considering how to best allocate the cost of shipping. It has come up with three alternatives: charge based on each address processed (parcel), charge based on the total number of requests (bulk shipments to multiple addressed would be assessed as one request), or allocate based on operating income. Total monthly shared cost for the department is $20,000. The following data are available: -What amount of shipping service costs would be allocated to each division if Shoppers Paradise uses total number of addresses as the allocation cost base?

Shoppers paradise, a wholesaler, ships various products worldwide. Some shipments are made to an individual customer and some are made on bulk orders that are mailed to multiple addresses. The company is considering how to best allocate the cost of shipping. It has come up with three alternatives: charge based on each address processed (parcel), charge based on the total number of requests (bulk shipments to multiple addressed would be assessed as one request), or allocate based on operating income. Total monthly shared cost for the department is $20,000. The following data are available: - What amount of shipping service costs would be allocated to each division if Shoppers Paradise uses operating income as the allocation cost base?

Cool Surfboards has two departments that both use a conference room (shared facilities). Total monthly conference room cost is $1,000. The Wave Blaster department has 15 employees that reserved 60 hours of conference room time. The Boogie Break department has 5 employees that reserved 100 hours of conference room time. If Cool Surfboards allocates shared facilities cost based on hours of use, what is the amount of share facilities costs allocated to the Boogie Break department?

Cool Surfboards has two departments that both use a conference room (shared facilities). Total monthly conference room cost is $1,000. The Wave Blaster department has 15 employees that reserved 60 hours of conference room time. The Boogie Break department has 5 employees that reserved 100 hours of conference room time. If Cool Surfboards allocates shared facilities cost based on hours of use, what is the amount of share facilities costs allocated to the Wave Blaster department?

Bright College is a community college located in Bright, CA. It provides instruction in five areas: Art, Business, Computer Science, Graphic Design, and Nursing. The college shares copy services with a total monthly cost of $10,000. The college is considering allocating costs using either number of copies or operating income as its allocation base. Data for the month of September, 2012 follows: - If Bright College uses operating income as the allocation cost base, what percentage would be used to allocate shared copy costs to each division?

Shared service departments are departments that work together to convert raw materials into finished goods.

The human resources department is an example of a shared service department.

Burrito Blast manufactures two types of burritos-bean and beef. They share payroll and human resource department services with other departments. What is the typical allocation base for the payroll and human resource department costs?

City Inspections has three departments using the services of the Payroll department. Total monthly payroll shared cost is $10,000. The Annual inspections department has 5 employees that make 20 requests. The Emergency services department has 8 employees that make 50 requests. The Roads department has 7 employees that make 30 requests. If City Inspections allocates shared payroll costs using number of reports as the allocation base, how much of the payroll costs will be allocated to Emergency services department?

A cost center is a responsibility center which is likely also a shared services department.

City Inspections has three departments using the services of the Payroll Department. Total monthly payroll shared cost is $10,000. The Annual inspections department has 5 employees that make 20 requests. The Emergency services department has 8 employees that make 50 requests. The Roads department has 7 employees that make 30 requests. If City Inspections allocates shared payroll costs using number of employees as the allocation base, how much of the payroll costs will be allocated to the Annual inspections department?

Trips to Remember, Inc. provides vacation trips to various locations around the world. The company's headquarters are located in Meadows Place, TX. The headquarters provide two main services to the four tourist locales: accounting and customer services (reservations). Budget and actual data for each of the four tourist locations are as follows: - The Accounting Services Department actually incurred $11,000 in accounting costs for May 2012. The Reservation Department incurred $23,000 in actual costs, of which $20,000 were traceable to the locations. What is the amount of accounting costs allocated to the Danville location, assuming accounting costs are allocated based on the number of reports requested?

April, Cherry Company had actual sales of $180,000 compared to budgeted sales of $195,000. Actual cost of goods sold was $135,000, compared to a budget of $136,500. Monthly operating expenses, budgeted at $28,000, totaled $25,000. Interest revenue of $2,500 was earned during April but had not been included in the budget. The performance report for April would show a net income variance of what amount?

The accounting department is NOT a shared service department.