11-101
110.
Yellville Regional Hospital is a small hospital with two service departments and three
revenue areas:
Service Dept
Direct
Costs
Sq Ft
Laundry
Pounds
Housekeeping
$80,000
–
16,000
Laundry
$132,000
500
Revenue Areas
Surgery
$400,000
1,500
48,000
Semiprivate rooms
$200,000
2,000
24,000
Maternity
$150,000
1,000
12,000
11-103
111.
Yellville Regional Hospital is a small hospital with two service departments and three
revenue areas:
Service Dept
Direct
Costs
Sq Ft
Laundry
Pounds
Housekeeping
$80,000
–
16,000
Laundry
$132,000
500
Revenue Areas
Surgery
$400,000
1,500
48,000
Semiprivate Rooms
$200,000
2,000
24,000
Maternity
$150,000
1,000
12,000
11-105
112.
Jack Donaldson owns and operates Jack’s Abstracting Service. Jack’s two revenue
generating operations (Abstracting Services and Closing Services) are supported by two
service departments: Clerical and Custodial. Costs in the service departments are
allocated in the following order using the designated allocation bases.
Clerical: number of transactions processed.
Custodial: square footage of space occupied.
Average and expected activity levels for next month are as follows:
Numbers of
Transactions
Square
Footage
Expected
Costs
Abstract
services
50
1,800
Closing
services
25
2,200
Clerical
1,600
$40,000
Custodial
5
10,000
Abstr
11-107
113.
Jack Donaldson owns and operates Jack’s Abstracting Service. Jack’s two revenue
generating operations Abstracting Services and Closing Services are supported by two
service departments: Clerical and Custodial. Costs in the service departments are
allocated in the following order using the designated allocation bases.
Clerical: number of transactions processed.
Custodial: square footage of space occupied.
Average and expected activity levels for next month are as follows:
Number of
Transactions
Square
Footage
Expected
Costs
Abstract
services
50
1,800
Closing
services
25
2,200
Clerical
1,600
$40,000
Custodial
5
10,000
11-109
114.
Ardvark Industries has two production departments, Assembly and Finishing and three
Service Departments, Personnel, Maintenance, and Cafeteria. Data relevant to Ardvark
are:
Dept
Direct
Cost
Personnel
Maintenance
Cafeteria
Assembly
Finishing
Personnel
$500,000
0.10
0.70
0.20
Maintenance
420,000
0.80
0.20
Cafeteria
200,000
0.20
0.20
0.30
0.30
Finishing
150,000
Assembly
380,000
$1,650,000
11-110
115
.
Mena Corporation has two production departments, Assembly and Finishing and three
service departments, Personnel, Maintenance, and Cafeteria. Data relevant to Mena are:
Dept
Direct
cost
Personnel
Maintenance
Cafeteria
Assembly
Finishing
Personnel
$500,000
0.10
0.70
0.20
Maintenance
420,000
0.80
0.20
Cafeteria
200,000
0.20
0.20
0.30
0.30
Finishing
150,000
Assembly
380,000
Assembly and Finishing work on two jobs during the month: Job 100 and 101. Costs are
allocated to jobs based on machine hours in assembly and labor hours in Finishing. The
machine and labor hours worked in each department are as follows:
Assembly
Finishing
Job 100
Labor Hours
200
800
Machine Hours
1,000
200
Job 101
Labor Hours
100
900
Machine Hours
500
100
11-113
116.
Boston Corporation has two production Departments: Assembly and Machining and two
service departments: Personnel and Cafeteria. Direct costs for each department and the
proportion of service costs used by the various departments for the month of July, 2016
are as follows:
Proportion of Services Used by:
Department
Direct
costs
Personnel
Cafeteria
Machining
Assembly
Personnel
$30,000
0.40
0.30
0.30
Cafeteria
$50,000
0.20
0.50
0.30
Machining
$80,000
Assembly
$70,000
11-115
117.
Data Master is a computer software consulting company. Its three major functional areas
are computer programming, information systems consulting, and software training.
Cynthia Moore, a pricing analyst in the Accounting Department, has been asked to develop
total costs for the functional areas. These costs will be used as a guide in pricing a new
contract. In computing these costs, Moore is considering three different methods of
allocating overhead costs–the direct method, the step method, and the reciprocal method.
Moore assembled the following data on overhead from its two service departments, the
Information Systems Department and the Facilities Department.
Service
Departments
User Departments
Info
Systems
Facilities
Computer
Program
Consult
Training
Total
Budgeted
Overhead
$50,000
$25,000
$75,000
$110,000
$85,000
$345,000
Info
Systems
(hrs)
400
1,100
600
900
3,000
Facilities
(Sq ft)
200,000
400,000
600,000
800,000
2,000,000
11-117
118.
Jack Donaldson owns and operates Jack’s Abstracting Service. Jack’s two revenue
generating operations (Abstracting Services and Closing Services) are supported by two
service departments: Clerical and Custodial. Costs in the service departments are
allocated in the following order using the designated allocation bases.
Clerical: number of transactions processed.
Custodial: square footage of space occupied.
Average and expected activity levels for next month are as follows:
Number of
Transactions
Square
Footage
Expected
Costs
Abstract
services
50
1,800
Closing
services
25
2,200
Clerical
1,600
$40,000
Custodial
5
10,000
11-119
119.
Yellville Regional Hospital is a small hospital with two service departments and three
revenue areas:
Service Dept
Direct
Costs
Sq Ft
Laundry
Pounds
Housekeeping
$80,000
–
16,000
Laundry
$132,000
500
Revenue Areas
Surgery
$400,000
1,500
48,000
Semiprivate Rooms
$200,000
2,000
24,000
Maternity
$150,000
1,000
12,000