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1) The use of budgeted service department cost rates protects using departments from _____.A. all of these answers are correctB. service outagesC. price fluctuationsD. service department efficiencies2) Cost allocation base refers to the _____.A. cost objectivesB. total allocated costsC. total costs to be allocatedD. cost driver 3) Murphy Company has two service departments Maintenance and Personnel as well as two production departments Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126000 $84000 $105000 $175000 Square footage 800 400 1600 1200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first then the amount of overhead that would be allocated from Personnel to Mixing is _____.A. $78000B. $63000C. $58500D. $315004) Kevin Company has two service departments Maintenance and Personnel as well as two production departments Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126000 $84000 $105000 $175000 Square footage 800 400 1600 1200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first then the amount of overhead that would be allocated from Personnel to Finishing is _____.A. $105000B. $31500C. $72000D. $42000

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