Answer the following questions using the information

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Cornerstones of Cost Management
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Chapter 7 / Exercise 7.4
Cornerstones of Cost Management
Hansen/Mowen
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Answer the following questions using the information below: Hugo, owner of Automated Fabric, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: Budgeted manufacturing overhead costs : Maintenance M (Support Dept) $300,000 Personnel P (Support Dept) $ 160,000 Weaving W (Weaving Dept) $650,000 Colorizing C (Colorizing Dept) $350,000 Services furnished : By Maintenance (budgeted labor-hours): to Personnel 1,000 to Weaving 7,000 to Colorizing 4,000 By Personnel (Number of employees serviced): Plant Maintenance 10 Weaving 30 Colorizing 20 18) Which of the following linear equations represents the complete reciprocated cost of the Personnel Department? A) P= $300,000 - $160,000 (1,000/12,000) M B) P= (1,000/12,000) M C) P= $160,000 + (1,000/12,000) M D) P= $160,000 Answer: C
19) What is the complete reciprocated cost of the Maintenance Department? A
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Cornerstones of Cost Management
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Chapter 7 / Exercise 7.4
Cornerstones of Cost Management
Hansen/Mowen
Expert Verified
Software For You encounters revenue-allocation decisions with its bundled product sales. Here, two or more units of the software are sold as a single package. Managers at Software For You are keenly interested in individual product-profitability figures. Information pertaining to its three bundled products and the stand-alone selling prices of its individual products is as follows: Stand-Alone Selling Price, Cost Package Packaged Price Word Processing (WP) $125 $18 WP & SS $220 Spreadsheet (SS) $150 $20 WP & AS $280 Accounting Software (AS) $225 $25 All three $380 Required: a. Using the stand-alone revenue-allocation method, allocate the $380 packaged price of "All Three" to the three software products 24. with selling prices as the weights. 25. with individual product costs as the weights. 26. based on physical units. b. Allocate the $380 packaged price of "All Three" to the three software products using the incremental revenue-allocation method. Assume Word Processing is the primary product, followed by Spreadsheet, and then Accounting Software. C D
22 1 / (1+ 1 + 1) × $380 = $126.67 per software package B
Answer the following questions using the information below: The Gows Company processes unprocessed goat milk up to the splitoff point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October: Direct Materials processed : 130,000 gallons (shrinkage was 10%) Production : condensed goat milk 52,200 gallons skim goat milk 64,800 gallons Sales : condensed goat milk $3.50 per gallon skim goat milk $2.50 per gallon The costs of purchasing the 130,000 gallons of unprocessed goat milk and processing it up to the splitoff point to yield a total of 117,000 gallons of salable product was $144,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 39,000 gallons (the remainder is

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