Exam 27: Service Department Charges

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Cannata Corporation has two operating divisions--a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $32 per shipment.The Logistics Department's fixed costs are budgeted at $372,300 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $335,000 and fixed costs totaled $382,850.The North Division had a total of 4,700 shipments and the South Division had a total of 5,300 shipments for the year. Required: a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year. b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

(Essay)

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Question 41

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

(Multiple Choice)

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Question 42

Gretter Corporation has two operating divisions--an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $36 per shipment.The Logistics Department's fixed costs are budgeted at $399,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $305,040 and fixed costs totaled $418,680.The Atlantic Division had a total of 2,600 shipments and the Pacific Division had a total of 5,600 shipments for the year.For performance evaluation purposes,how much actual Logistics Department cost should NOT be charged to the operating divisions at the end of the year?

(Multiple Choice)

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Question 43

For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

(True/False)

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Question 44

Showing 41 - 44 of 44

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Super-Variable Costing

Master Budgeting

Flexible Budgets and Performance Analysis

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Statement of Cash Flows

Financial Statement Analysis

Cost of Quality

Activity-Based Absorption Costing

The Predetermined Overhead Rate and Capacity

Job-Order Costing: a Microsoft Excel-Based Approach

Fifo Method

Service Department Allocations

Analyzing Mixed Costs

Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Standard Cost Systems: a Financial Reporting Perspective Using Microsoft Excel

Transfer Pricing

Pricing Decisions

The Concept of Present Value

Income Taxes and the Present Value Method

the Direct Method of Determining the Net Cash Provided by Operating Activities

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