Accounting Chapter 11 Homework Round The Final Answer The Nearest Dollar

Student Name:

Class:

Administration Accounting Maintenance Molding Painting

10,000 30,000 20,000 360,000 90,000

6.00$ 120.00$ 17.50$ 312.00$ 162.00$

Administration Accounting Maintenance Molding Painting

Building area

Employees

Equipment value

Maintenance Accounting Administration Molding Painting

Maintenance

Accounting

Administration

Totals

200,000$ 400,000$ 250,000$ 687,500$ 485,000$

Correct!

Molding Painting

Molding

Painting

Total

Direct labor

Overhead (direct)

Overhead (allocated)

Totals

Unit cost:

237,500$ 210,000$

Molding:

Painting:

Part c. Unit cost of allocated service department costs

Part b.

Direct Costs

Direct materials

FROM:

Round allocations to the nearest dollar.

To

Instructor

McGraw-Hill/Irwin

Problem 11-48

MODEL, INC.

Proportion Used By

Building area

Equipment value (in 000’s)

Allocation Base

Part a.

Employees

Administration Accounting Maintenance Molding Painting

250,000$

237,500$

Direct labor

Overhead

Direct costs of Molding Department:

Direct costs of Painting Department:

Accounting department cost

Maintenance department cost

Desirable average cost per unit of service departments

Direct materials

Overhead

Used by

Additional Information:

Administration department cost

MODEL, INC.

Given Data P11-48:

Allocation base

Allocation base use:

Equipment value (in 000’s)

Building area

Student Name:

Class:

Administration

Accounting Domestic International

–25 45 180

25,000 – 20,000 80,000

360,000$ 144,000$ 936,000$ 3,600,000$

Administration

Accounting Domestic International

Administration

Accounting Domestic International

Administration allocation

Accounting Allocation

Totals costs

360,000 144,000 936,000 3,600,000

The computed cost to be allocated for Accounting is:

.98 S2 = 180,000

S2 = 144,000 + 36,000 + .02 S2

The computed cost to be allocated for Administration is:

Administration

Accounting Domestic International

Total

Accounting

Administration

Costs

Substitute Accounting costs into the equation for Administration and solve in the

shaded area below. Round the final answer to the nearest dollar.

Substitute the computed total Administration costs into the equation for Accounting and

solve as before. Round the final answer to the nearest dollar.

S2 = 144,000 + .10 (360,000 +.2 S2)

S1 = 360,000 + (.2 x 183,673)

The equations set up:

S2 = 144,000 + 10% S1

S1 = 360,000 + 20% S2

S1 = Administration; S2 = Accounting

Part c. Reciprocal Method

Part b. Step Method

Part a. Direct Method

Transactions

Department direct costs

Instructor

McGraw-Hill/Irwin

Problem 11-49

BLUSTAR COMPANY

Department costs

Employees

Administration allocation

Accounting Allocation

Total costs allocated

Department costs

Administration

Accounting Domestic International

BLUSTAR COMPANY

Given Data P11-49:

Summary of operations:

Student Name:

Class:

Steam Fixed Variable Equipment

Generation Costs Costs Maintenance Alpha Beta

– – 0.40 – 0.10 0.50

Let: S1 = Steam generation

S2 = Electric generating – fixed

S3 = Electric generating – variable

S4 = Equipment maintenance

P1 = Alpha

P2 = Beta

Amount to

Be Allocated S4 S2 S3 P1 P2

Equipment maintenance (S4)

Electric generating:

Fixed (S2)

Variable (S3)

Steam generation (S1)

Amount

Equipment maintenance

Direct costs

174,000$

From:

Forgone steam sales

Part c.

Instructor

McGraw-Hill/Irwin

Problem 11-52

STEAMCO CORPORATION

tenth of a thousand (one decimal place).

Note: All numbers used in this problem are in thousands. Round all allocations to the nearest

Services Used by

To Department:

Cost source

Steam Generation

Service Department

Part b.

Fixed costs

Variable costs

Equipment Maintenance

Electric Generating

Steam Fixed Variable Equipment

Generation Costs Costs Maintenance Alpha Beta

– – 0.40 – 0.10 0.50

Direct

Cost

Steam Generation (S1)

Income from sale on internally generated power (for part c.)

Annual cost to generate electricity internally

Annual cost of electricity from Power Company

Additional Information:

Beta (P2)

Equipment Maintenance (S4)

Alpha (P1)

90,000

240,000

Electric Generating:

Department

Fixed costs (S2)

Variable costs (S3)

Direct departmental costs:

Services Used by

STEAMCO CORPORATION

Given Data P11-52:

Steam Generation

Service Department

Summary of services used:

Equipment Maintenance

Variable costs

Fixed costs

Electric Generating