Exam 12: Cost Allocation

Marcos Company has two service departments,Maintenance and Personnel.Marcos Company also has 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: If the direct method is used to allocate service department costs,then the total cost of the Maintenance Department after the Personnel Department cost allocation would be ________.

Gonzalez Company makes three types of products.The company has two types of customers.The cost to serve all customers is $12,000 and is allocated to customer types based on the number of manager visits to customer locations.The following data are available: What is the gross profit margin for all three products for Customer Type 1?

Falcon Company manufactures three products from a joint process.Joint costs for the year amounted to $300,000.The following data was available: Assume the physical-units method of allocating joint costs is used.What amount of joint costs is allocated to Product Y?

For external financial reporting,only ________ costs are assigned to products or services.For internal financial reporting,any ________ costs can be assigned to products or services.

By-products normally have significant sales value in comparison with other jointly-produced products emerging at the split-off point.

Allocating fixed costs based on long-range plans may inadvertently result in a tendency of mangers to ________.

The preferred cost driver for costs from central services is either actual or estimated usage.

Corker Company manufactures three products from a joint process.Joint costs for the year amounted to $250,000.The following data was available: Assume the relative-sales-value method of allocating joint costs is used.What amount of joint costs is allocated to Product X?

When determining the cost of main products from a joint production process,________ is NOT included.

The logical cost driver for costs from janitorial services is square feet.

Derby Company has two service departments,Maintenance and Personnel.Derby Company also has 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: Assume the step-down method is used to allocate service department costs and the Personnel Department is allocated first.What is the total cost of the Finishing Department after allocation of the service departments costs?

A cost allocation base refers to a ________.

Rodney Company has two production departments called Mixing and Finishing.The maintenance department serves both production departments.Budgeted fixed costs for the maintenance department are $30,000.Budgeted variable costs for the maintenance department are $5.00 per labor hour.Other relevant data follow: Actual maintenance department costs: The amount of variable maintenance department costs allocated to the Finishing Department should be ________.

Assume the cost object is customers.Why should indirect costs associated with customers be allocated to customers instead of producing departments?

When using the step-down method,once a service department's costs are allocated to other departments,nothing is ever allocated back to it.

Theresa Company has two service departments,Maintenance and Personnel.Theresa Company also has 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: If the direct method is used to allocate service department costs,then the total cost of the Mixing Department after allocation would be ________.

Joint costs are not allocated to a by-product.

Puma Company has three service departments,X,Y and Z and two production departments,P1 and P2.Costs in Departments X and Y are allocated based on square feet and costs in Department Z are allocated based on direct labor hours. The following data are available: Service Department: Producing Department: Assume the direct method of allocating service department costs is used. Required: A)What is the total cost of Producing Department P1 after allocating the service departments' costs? B)What is the total cost of Producing Department P2 after allocating the service departments' costs?

Some service department activities support customers rather than the production process.These costs are traced directly to ________ instead of ________.

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________.