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Question;Problem 10-21 Product versus general, selling, and administrative costsThe following transactions pertain to 2012, the first year of operations of Hall Company.All inventory was started and completed during 2012. Assume that all transactions arecash transactions.1. Acquired \$4,000 cash by issuing common stock.2. Paid \$720 for materials used to produce inventory.3. Paid \$1,800 to production workers.4. Paid \$540 rental fee for production equipment.5. Paid \$180 to administrative employees.6. Paid \$144 rental fee for administrative office equipment.7. Produced 300 units of inventory of which 200 units were sold at a price of \$12 each.RequiredPrepare an income statement, balance sheet, and statement of cash flows.Problem 11-23 Context-sensitive nature of cost behavior classificationsPacific Banks start-up division establishes new branch banks. Each branch opens withthree tellers. Total teller cost per branch is \$90,000 per year. The three tellers combinedcan process up to 90,000 customer transactions per year. IF a branch does not attain avolume of at least 60,000 transactions during its first year of operations, it is closed. Ifthe demand for services exceeds 90,000 transactions, and additional teller is hired, andthe branch is transferred from the start-up division to regular operations.Requireda. What is the relevant range of activity for new branch banks?b. Determine the amount of teller cost in total and the teller cost per transaction forbranch that processes, 60,000, 70,000, 80,000, or 90,000 transactions. In this case (theactivity base is the number of transactions for a specific branch), is the teller cost afixed or a variable cost?c. Determine the amount of teller cost in total and the teller cost per branch for PacificBank, assuming that the start-up division operates 10, 15, 20, or 25 branches. In thiscase (the activity base is the number of branches), is the teller cost a fixed or a variablecost?Problem 12-15 Selecting an appropriate cost driver (What is the base?)The Vest School of Vocational Technology has organized the school training programsinto three departments. Each department provides training in a different area as follow:nursing assistant, dental hygiene, and office technology. The schools owner, WilmaVest, wants to know how much it costs to operate each of the three departments. Toaccumulate the total cost for each department, the accountant has identified severalindirect costs that must be allocated to each. These costs are \$10,080 of telephoneexpense, \$2,016 of supplies expense, \$720,000 of office rent, \$144,000 of janitorialservices, and \$150,000 of salary paid to the dean of students. To provide a reasonablyaccurate allocation of costs, the accountant has identified several possible cost drivers.These drivers and their association with each department follow.Cost DriverNumber of telephonesNumber of Faculty membersSquare footage of office spaceNumber of secretariesDepartment 1282028,8002Department 2 Department 33252161216,80012,00022a. Identify the appropriate cost objects.b. Identify the appropriate cost driver for each indirect cost and compute the allocationrate for assigning each indirect cost to the cost objects.c. Determine the amount of telephone expense that should be allocated to each of thethree departments.d. Determine the amount of supplies expense that should be allocated to Department 3.e. Determine the amount of office rent that should be allocated to Department 2.f. Determine the amount of janitorial services cost that should be allocated to Department1.g. Identify two cost drivers not listed here that could be used to allocate the cost of theDeans salary to the three departments.

Paper#39064 | Written in 18-Jul-2015

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