Chapter 7 3 Hibernation Company Incurred 500000 Manufacture The

subject Type Homework Help
subject Pages 9
subject Words 919
subject Authors Don R. Hansen, Maryanne M. Mowen

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
139. Hibernation Company incurred $500,000 to manufacture the following products in a joint process:
Selling Price
Product
Units Produced
Weight per Unit
per Unit
I
1,250
8 lbs.
$ 5
J
2,500
6 lbs.
10
K
3,750
4 lbs.
10
L
5,000
2 lbs.
5
How much joint cost would be allocated to Product I based on the physical units method?
140. Cumadin Corporation, which manufactures products W, X, Y, and Z through a joint process costing
$18,000, has the following data for 2014:
Sales Value
Product
Units Produced
at Split-Off
W
10,000
$5,000
X
6,000
2,500
Y
16,000
3,000
Z
8,000
4,500
What is the amount of joint costs assigned to Product X using the sales-value-at-split-off method?
141. Cumadin Corporation, which manufactures Products W, X, Y, and Z through a joint process costing
$18,000, has the following data for 2014:
Sales Value
Product
Units Produced
at Split-Off
W
10,000
$5,000
X
6,000
2,500
Y
16,000
3,000
Z
8,000
4,500
What is the amount of joint costs assigned to Product Y using the sales-value-at-split-off method?
page-pf2
142. Foster Company incurred $200,000 to manufacture the following products in a joint process:
Selling Price
Product
Units Produced
Weight per Unit
per Unit
I
500
8 lbs.
$ 5
J
1,000
6 lbs.
10
K
1,500
4 lbs.
10
L
2,000
2 lbs.
5
How much joint cost would be allocated to Product K based on the total sales value method?
143. Suppose that a Plywood manufacturer processes wood pulp into four grades of Plywood totaling 500,000
board feet as follows at a joint cost of $450,000:
Grade
Board Feet
Final Sales Value
First and second
75,000
$ 56,250
No. 1 common
200,000
180,000
No. 2 common
100,000
105,000
No. 3 common
125,000
127,500
What amount of joint costs will be allocated to No. 1 common using the final sales value method?
144. Which of the following methods allocates joint production costs based on their proportionate share of
eventual revenue less further processing costs?
page-pf3
145. Algonquin Products produces two products, X and Y, in a single process. In 2011, the joint costs of this
process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing
costs beyond the split-off point were: X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for $7.50 per
unit.
What amount of joint costs will be allocated to product X using the net realizable value net realizable value
method?
146. Algonquin Products produces two products, X and Y, in a single process. In 2011, the joint costs of this
process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing
costs beyond the split-off point were X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for $7.50 per
unit.
What is the gross profit of product Y assuming the net realizable value method is used?
147. Which of the following methods allocates a joint cost such that each product has the same cost of goods
sold percentage?
148. Which joint cost allocation method is described by the following statement?
Overall sales revenue minus overall costs (joint plus further processing costs) is calculated to yield gross profit
and the gross profit percentage. Each product is then assigned the same cost of goods sold percentage.
page-pf4
149. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
Refer to Figure 7-7. What is the amount of joint costs allocated to Brights using the net realizable value
method?
150. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
151. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
Refer to Figure 7-7. What is the gross profit for Brights assuming the net realizable value method is used?
page-pf5
152. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
Refer to Figure 7-7. What is the amount of joint costs allocated to Dulls using the physical units method?
153. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
Refer to Figure 7-7. What is the amount of joint costs allocated to Dulls using the constant gross margin
percentage method?
154. Figure 7-7
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run
costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past
the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market
price is $250 for Brights and $200 for Dulls.
Refer to Figure 7-7. What is the gross profit for Dulls assuming the constant gross margin percentage method
is used?
page-pf6
155. Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at
a joint cost of $300,000:
Grade
Board Feet
Final Sales Value
First and second
75,000
$ 56,250
No. 1 common
200,000
180,000
No. 2 common
100,000
105,000
No. 3 common
125,000
127,500
What amount of joint costs will be allocated to No. 2 common using the constant gross margin percentage method?
156. Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at
a joint cost of $300,000:
Grade
Board Feet
Final Sales Value
First and second
75,000
$ 56,250
No. 1 common
200,000
180,000
No. 2 common
100,000
105,000
No. 3 common
125,000
127,500
What is the gross profit of No. 3 common if the constant gross margin percentage method is used?
page-pf7
157. Some support departments typically found in manufacturing and nonmanufacturing organizations are as
follows:
Cafeteria
Personnel
Maintenance
Purchasing
Accounting
Required:
For each of the preceding support departments, indicate potential bases that could be used to allocate costs to
the producing departments.
158. Describe the differences between support and producing departments. Give three examples of each.
page-pf8
159. Consequence Printing operates a Graphics business at two different locations. Consequence Printing has
one support department that is responsible for cleaning, service, and maintenance of its printing equipment. The
costs of the support department are allocated to each Graphics Center on the basis of total prints 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 (prints made) are as follows:
Graphics Center 1
Graphics Center 2
Normal activity (graphics)
3,000,000
2,000,000
Actual activity (graphics)
2,500,000
2,200,000
Required:
a.
For purposes of performance evaluation, calculate the fixed costs allocated to
Graphics Center 1.
b.
For purposes of performance evaluation, calculate the fixed costs allocated to
Graphics Center 2.
c.
Calculate the support department costs not allocated to the two Graphics Centers.
page-pf9
160. Silver Chariots Trucking Company incurred $5,000 of indirect advertising costs for its operations. The
following data have been collected for 2014 for its three departments:
New Trucks
Used Trucks
Parts and Service
Sales
$50,000
$35,000
$15,000
Direct advertising costs
$2,500
$2,000
$500
Newspaper ad space
60%
35%
5%
Required:
Determine the costs assigned to each department using the following activity drivers:
a.
Sales
b.
Direct advertising costs
c.
Newspaper ad space
Direct
Newspaper
Sales
Advertising
Space
Total
%
Total
%
%
New Trucks
$ 50,000
50%
$2,500
50%
60%
Used Trucks
35,000
35%
2,000
40%
35%
Parts & services
15,000
15%
500
10%
5%
$100,000
100%
$5,000
100%
100%
page-pfa
161. Citizens Bank has two bank locations: Main and Suburbs. The central office provides check-processing
services for the two banks. Information pertaining to the banks is as follows:
Check Processing
Main
Suburbs
Budgeted fixed costs
$100,000
-
-
Budgeted variable rate per hour
$20
-
-
Normal usage in hours
-
600
400
Actual fixed costs
$107,500
-
-
Actual variable costs
$ 17,500
-
-
Actual usage in hours
-
550
250
Required:
a.
Use the direct method to allocate the check-processing center costs to each bank to provide information for setting service charges.
b.
Use the direct method to allocate the check processing center costs to each bank for performance evaluation purposes.
c.
Determine the costs of the check-processing center NOT allocated to the two banks. Why were these costs not allocated to the operating
units?
page-pfb
162. Describe the differences between the direct, sequential and reciprocal methods of allocating support
department costs to production departments.
163. Arctic Tundra Company has two support departments (S1 and S2) and two producing departments (P1 and
P2). Estimated direct costs and percentages of services used by these departments are as follows:
Used by Department
Support Dept.
S1
S2
P1
P2
S1
-
10%
40%
50%
S2
20%
-
50%
30%
Direct costs
$4,500
$8,000
$10,000
$15,000
Required:
a.
Prepare a schedule allocating the support department costs to the producing departments using the direct allocation method.
b.
Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method.

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.