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Title: Problem 24-4A
QA_Ori:
Part 1
Allocations of joint costs on the basis of sales values
Tree pruning and care: $405,000
Grade
Sales
Value
Percent
of Total
Allocated
Cost
No. 1 $450,000 48.0% $194,400
Picking, sorting, and grading: $202,500
Grade
Sales
Value
Percent
of Total
Allocated
Cost
No. 1 $450,000 48.0% $ 97,200
Delivery: $30,000 to Grade Nos. 1 & 2
Grade
Sales
Value
Percent
of Total
Allocated
Cost
No. 1 $450,000 60.0% $18,000
* If students did not round percents to one-tenth, their answers will vary
slightly from those reported here.
**The No. 3 Grade delivery costs are given in the problem description.
Part 2
GEORGIA ORCHARDS
Income Statement
For Year Ended December 31, 2013
No. 1 No. 2 No. 3 Combined
Sales (by grade)
Costs
Tree pruning and care 194,400 129,600 81,000 405,000
Part 3
Delivery costs include both crating and hauling costs. Georgia is able to identify the
portion of the cost directly related to the No. 3 peaches, presumably because the No. 3s
Title: Problem 24-5A
QA_Ori:
Part 1
Process time 6.0 days
Part 2
Part 3
To increase the manufacturing cycle efficiency to 0.75, Oakwood needs to reduce the
Title: Problem 24-1B
QA_Ori:
Part 1
These costs are assigned to Style's department as follows
Department Square Footage Rate Total
Part 2
Market rates are used to allocate occupancy costs for the building rent. Lighting and
Occupancy Costs
Total
Costs
Value-Based
Costs
Usage-Based
Costs
Building rent $400,000 $400,000
Value-based costs are allocated in two steps
(i) Compute market value of each floor
Floor
Square
Footage
Value per
Sq. Ft. Total
First floor 7,500 $40 $300,000
(ii) Allocate the $400,000 to each floor based on its percent of market value
Floor
Market
Value
% of
Total
Allocated
Cost
Cost per
Sq. Ft.
First floor $300,000 60% $240,000 $32.00
Usage-based costs allocation rate = $65,000 / 20,000 sq. ft. = $3.25 per sq. ft.
Total allocation rates for the departments on all three floors are
Floor Value Usage Total
These rates are applied to allocate occupancy costs to Style’s department
Department
Square
Footage Rate Total
Part 3
A basement manager would prefer the allocation based on market value. This is a
reasonable and logical approach to allocation of occupancy costs. With a flat rate
Title: Problem 24-2B
QA_Ori:
BONANZA ENTERTAINMENT
Forecasted Departmental Income Statements
For Year Ended December 31, 2014
Movies
Video
Games
Compact
Discs Combined
Sales $648,000 $216,00
0
$300,000 $1,164,00
0
(1)
Cost of goods sold 453,600 166,320 195,000
814,920
(2)
1,795
$ 36,235 $ 90,480
Supporting Computations—coded (1) through (5) in statement above
Note 1 (Sales)
Movies
Video
Games
Compact
Discs
2013 sales $600,000 $200,000
Movies
Video
Games
Compact
Discs
2013 cost of goods sold $420,000 $154,000
2013 sales $600,000 $200,000
gross margin.
Note 3 (Store Supplies Used)
Movies
Video
Games
Compact
Discs
2013 store supplies used $ 4,000 $ 1,000
Movies
Video
Games
Compact
Discs
2013 rent $41,000 $ 9,000
One-fourth from movies to
compact discs (10,250) $10,250
Note 5 (Office Department Expenses)
Movies
Video
Games
Compact
Discs
2014 sales $648,000 $216,000 $300,000
* Rounded to the nearest 0.1% * If students round to something other than
one-tenth of a percent, their numbers will slightly vary.
†Adjusted to eliminate rounding difference.
Title: Problem 24-3B
QA_Ori:
Part 1
a.
Responsibility Accounting Performance Report
Dept. Manager, Refrigerator Department
For the Month of April
Budgeted Actual Over (Under)
Amount Amount Budget
Controllable Costs
Raw materials $400,000 $385,000 $(15,000)
b.
Responsibility Accounting Performance Report
Dept. Manager, Dishwasher Department
For the Month of April
Budgeted Actual Over (Under)
Amount Amount Budget
Controllable Costs
Raw materials $200,000 $202,000 $ 2,000
c.
Responsibility Accounting Performance Report
Plant Manager, Chicago Plant
For the Month of April
Budgeted Actual Over (Under)
Amount Amount Budget
Controllable Costs
Dept. manager salaries $ 104,000 $ 101,500 $ (2,500)
Part 2
The refrigerator department manager did a good job of controlling costs and meeting
