work_at_home_soultions_ch12[1]

# work_at_home_soultions_ch12[1] -...

This preview shows pages 1–4. Sign up to view the full content.

Chapter 12 Cost Accumulation, Tracing, and Allocation Exercise 12-1 Step 1 is to determine the allocation rate: Fringe benefit cost \$370,000 Allocation rate = –––––––––––––––––––– = ––––––––––– = \$7,400 per employee No. of employees 50 (Cost driver) Step 2 is to assign the cost by multiplying the allocation rate by the weight of the base (i.e., cost driver) for each divi- sion: Division Allocation Rate x Weight of Base = Allocated Cost A \$7,400 x 38 = \$281,200 B \$7,400 x 12 = 88,800 Total allocated cost \$370,000 Exercise 12-2 a. Items Direct Cost Indirect Cost Cost of building permits X Materials used in commercial construction projects X Depreciation on home building equipment (small tools such  as hammers or saws) X Company president’s salary X Depreciation crane used in commercial construction X Depreciation on home office building X Salary of corporate office manager X Wages of workers assigned to a specific construction pro- ject X Supplies used by the Commercial Construction Division X Labor on a particular house X 12-1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Salary of the supervisor of commercial construction projects X Supplies, such as glue and nails, used by the Home Con- struction Division X Exercise 12-2 (continued) b. Items Direct Cost Indirect Cost Cost of building permits X Materials used in commercial construction projects X Depreciation on home building equipment (small tools such  as hammers or saws) X Company president’s salary X Depreciation crane used in commercial construction X Depreciation on home office building X Salary of corporate office manager X Wages of workers assigned to a specific construction pro- ject X Supplies used by the Commercial Construction Division X Labor on a particular house X Salary of the supervisor of commercial construction projects X Supplies, such as glue and nails, used by the Home Con- struction Division X c. Items Direct Cost Indirect Cost Cost of building permits X Materials used in commercial construction projects X Depreciation on home building equipment (small tools such  12-2
as hammers or saws) X Company president’s salary X Depreciation crane used in commercial construction X Depreciation on home office building X Salary of corporate office manager X Salary of worker assigned to a specific construction project X Supplies used by the Commercial Construction Division X Labor on a particular house X Salary of the supervisor of commercial construction projects X Supplies, such as glue and nails, used by the Home Con- struction Division X Exercise 12-3 a. Step 1 is to determine the allocation rate: Allocation rate Overhead cost \$576,000 for = ––––––––––––––––––– = ––––––––––– = \$48 per DL hour

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This document was uploaded on 08/24/2011.

### Page1 / 14

work_at_home_soultions_ch12[1] -...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online