Exam 7: Allocating Costs of Support Departments and Joint Products

Which joint cost allocation method is described by the following statement? Joint cost is prorated to the products on the basis of each product's share of units.

Which of the following industries would most likely have joint costs in production?

A sawmill processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: - What is the gross profit of No.3 common if the constant gross margin percentage method is used?

Plants Company has two support departments (S1 and S2) and two producing departments (P1 and P2).Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows: If Plants used the reciprocal method, the algebraic equation expressing the total costs allocated from S1 is

FIGURE 7-5 Wilson, Inc., operates a copy business at two different locations.Wilson, Inc., has one support department that is responsible for cleaning, service, and maintenance of its copying equipment.The costs of the support department are allocated to each copy center on the basis of total copies made. During the first month, the costs of the support department were expected to be $400,000.Of this amount, $120,000 is considered a fixed cost.During the month, the support department incurred actual variable costs of $256,000 and actual fixed costs of $144,000. Normal and actual activity (copies made) are as follows: -Refer to Figure 7-5.Support department costs NOT allocated to the two copy centers are

The sales-value-at-split-off method allocates joint production costs based on each product's share of

Which of the following would be the most appropriate base for allocating the costs of the housekeeping department?

Rules of financial reporting (GAAP) require

Plants Company has two support departments (S1 and S2) and two producing departments (P1 and P2).Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows: If Plants uses the direct method, the ratio representing the portion of Department S2 allocated to P1 is

A possible causal factor to use when allocating cafeteria costs would be

Jacob Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y.The Maintenance Department costs of $60,000 are allocated on the basis of standard service used.The Personnel Department costs of $9,000 are allocated on the basis of number of employees.The direct costs of Departments X and Y are $18,000 and $30,000, respectively. Data on standard service hours and number of employees are as follows: Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours. What is the overhead rate for Department X assuming the direct method is used?

_______________ are products with substantial value which are produced simultaneously by the same process up to a split-off point.

Rust Company has two support departments (S1 and S2) and two producing departments (X and Y).Department S1 serves Departments S2, X, and Y in the following percentages, respectively: 10%, 35%, 55%.Department S2 serves Departments S1, X, and Y in the following percentages, respectively: 6%, 50%, and 44%.Direct department costs for S1, S2, X, and Y are $15,000, $8,000, $105,000, and $97,500, respectively. - What are the total costs to be allocated from Department S1?

Hanson Printing operates a copy business at two different locations.Hanson Printing has one support department that is responsible for cleaning, service, and maintenance of its copying equipment.The costs of the support department are allocated to each copy center on the basis of total copies made. During the first month, the costs of the support department were expected to be $100,000.Of this amount, $30,000 is considered a fixed cost.During the month, the support department incurred actual variable costs of $64,000 and actual fixed costs of $36,000. Normal and actual activity (copies made) are as follows: Required:

Bond Corporation, which manufactures products W, X, Y, and Z through a joint process costing $18,000, has the following data for 2011: What is the amount of joint costs assigned to Product X using the sales-value-at-split-off method?

FIGURE 7-5 Wilson, Inc., operates a copy business at two different locations.Wilson, Inc., has one support department that is responsible for cleaning, service, and maintenance of its copying equipment.The costs of the support department are allocated to each copy center on the basis of total copies made. During the first month, the costs of the support department were expected to be $400,000.Of this amount, $120,000 is considered a fixed cost.During the month, the support department incurred actual variable costs of $256,000 and actual fixed costs of $144,000. Normal and actual activity (copies made) are as follows: - Refer to Figure 7-5.For purposes of performance evaluation, fixed costs allocated to Copy Center 2 are

Support department costs are accounted for in which one of the following ways?

Nelson Inc.obtains two products and a by-product from its production process.By-product revenues are treated as other income and a noncost approach is used to assign costs to them.During the period, 1,200 units were processed at a cost of $12,000 for materials and conversion costs, resulting in the following: Required:

The Zink Company assigns plant administration costs to the production departments based on the number of employees.Which of the following would NOT be a good combination of common costs with an activity driver?

The following information pertains to Utter Company: Utter Company does not divide costs into fixed and variable components.Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. - Predetermined overhead rates for fabrication and assembly are based on direct labor hours.(Round amounts to dollars.) If the direct method is used to allocate support department costs, the predetermined overhead rate for the Fabrication Department (rounded to two decimal places) would be