Chapter 4B - Solution Manual

Chapter 4B - Solution Manual - Chapter 04B Service...

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Chapter 04B Service Department Allocations Appendix 4B Service Department Allocations Exercise 4B-1  (15 minutes) Service Departments Operating Departments Admini- stration Physical Plant Services Undergraduate Programs Graduate Programs Total Departmental costs before allocations. ................................. $2,070,000 $720,000 $23,650,000 $2,980,000 $29,420,000 Allocations: Administration costs (40/45, 5/45). ........................ (2,070,000) 1,840,000 230,000 Physical Plant costs (250/300, 50/300)*. .............. (720,000 ) 600,000 120,000 Total costs after allocation. ........... $ 0 $ 0 $26,090,000 $3,330,000 $29,420,000 *Based on the space occupied by the two operating departments, which is 300,000 square feet. 4B-1
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Chapter 04B Service Department Allocations Exercise 4B-2  (15 minutes)  Service Departments Operating Departments Admini- stration Building Services Groceries Coffee Shop Total Departmental costs before allocations. .................... $200,000 $60,000 $3,860,000 $340,000 $4,460,000 Allocations: Administration costs (320/3,200, 2,720/3,200, 160/3,200)*. .................................................... (200,000) 20,000 170,000 10,000 Building Services costs (9,500/10,000, 500/10,000)†. .................................................. (80,000 ) 76,000 4,000 Total costs after allocation. ...................................... $ 0 $ 0 $4,106,000 $354,000 $4,460,000 *Based on employee hours in the other three departments, 320 + 2,720 + 160 = 3,200. †Based on space occupied by the two operating departments, 9,500 + 500 = 10,000. Both the Building Services Department costs of $60,000 and the Administration costs of $20,000 that have been allocated to the Building Services Department are allocated to the two operating departments. 4B-2
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Chapter 04B Service Department Allocations Exercise 4B-3  (20 minutes) Service  Departments Operating  Departments Admini- strative Jani- torial Mainte- nance Prep Finishing Total Costs before allocation. .......................... $84,000 $67,800 $36,000 $256,100 $498,600 $942,500 Allocation: Administrative 1 : (60/1,200; 240/1,200;  600/1,200; 300/1,200). ...................... (84,000) 4,200 16,800 42,000 21,000 Janitorial 2 : (10,000/100,000;  20,000/100,000; 70,000/100,000). .... (72,000) 7,200 14,400 50,400 Maintenance 3 : (10,000/40,000;  30,000/40,000). .................................                                         (60,000 )       15,000           45,000     Total cost after allocations. ..................... $                 0    $                 0    $                 0    $327,500 $615,000 $942,500 1 Allocation base: 60 employees + 240 employees + 600 employees + 300 employees = 1,200 employees 2 Allocation base: 10,000 square feet + 20,000 square feet + 70,000 square feet = 100,000 square feet 3 Allocation base: 10,000 hours + 30,000 hours = 40,000 hours 4B-3
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Chapter 04B Service Department Allocations Exercise 4B-4  (20 minutes) Service  Departments Operating  Departments Admini- strative Jani- torial Equip- ment  Mainte- nance Prep Finishing Total Costs before allocation. ...................... $84,000 $67,800 $36,000 $256,100 $498,600 $942,500 Allocation: Administrative 1 : (600/900; 300/900). (84,000) 56,000 28,000 Janitorial 2 (20,000/90,000; 70,000/90,000). ... (67,800) 15,067 52,733 Equipment Maintenance 3 (10,000/40,000; 30,000/40,000). ...                                         (36,000 )           9,000           27,000     Total cost after allocations. ................. $                  0    $                  0    $                  0    $336,167 $606,333 $942,500 1 Allocation base: 600 employees + 300 employees = 900 employees 2 Allocation base: 20,000 square feet + 70,000 square feet = 90,000 square feet 3
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Chapter 4B - Solution Manual - Chapter 04B Service...

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