Chapter 12 Homework 2

Chapter 12 Homework 2 - department slows down, more cost...

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Chapter 12 Problem 25 1. Machine Tools: $0.50*60,000 + .65*$80,000 = $82,000 Special Products: $0.50*60,000 + .35*$80,000 = $58,000 2. Both divisions used the same amount of machine hours so the $163,000 would be split equally or $81,500 per division. 3. Allocating all of the costs based on machine hours is unfair because if one
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Unformatted text preview: department slows down, more cost will be assigned to the other department. 4. Managers will understate their estimates so that less cost is assigned to them. Top management could implement penalties for underestimating and reward accurate estimates....
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This note was uploaded on 11/16/2009 for the course ACCT 152 taught by Professor Bayak during the Spring '07 term at Lehigh University .

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