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Three Accounting Questions




Question;Won Han Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.Indirect Expense Cost Allocation BaseSupervision $ 82,600 Number of employeesUtilities 51,000 Square feet occupiedInsurance 23,000 Value of assets in useTotal $ 156,600Departmental data for the company?s recent reporting period follow.Department Employees Square Feet Asset ValuesMaterials 24 22,000 $ 6,100 Personnel 6 11,000 1,830 Manufacturing 48 55,000 36,600 Packaging 42 22,000 16,470 Total 120 110,000 $ 61,000 (1) Use this information to allocate each of the three indirect expenses across the four departments. (Omit the "$" & "%" signs in your response.)Supervision expensesDepartment % of Total CostMaterials % $Personnel Manufacturing Packaging Totals % $Utilities expensesDepartment % of Total CostMaterials % $Personnel Manufacturing Packaging Totals % $Insurance expensesDepartment % of Total CostMaterials % $Personnel Manufacturing Packaging Totals % $(2)Prepare a summary table that reports the indirect expenses assigned to each of the four departments. (Omit the "$" sign in your response.)Supervision Utilities Insurance TotalMaterials $ $ $ $Personnel Manufacturing Packaging Totals $ $ $ $2.value:1.00 pointsPane Company produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data.Rounded Edge Squared Edge Total Direct materials $ 9,400 $ 21,700 $ 31,100 Direct labor 6,100 11,800 17,900 Overhead (300% of direct labor cost) 18,300 35,400 53,700 Total cost $ 33,800 $ 68,900 $ 102,700 Quantity produced 10,400 ft. 14,200 ft. Average cost per ft. $ 3.25 $ 4.85 Pane?s controller wishes to apply activity-based costing (ABC) to allocate the $53,700 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information.Overhead Cost Category (Activity Cost Pool) CostSupervision $ 2,148Depreciation of machinery 28,680Assembly line preparation 22,872Total overhead $ 53,700She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines.UsageOverhead Cost Category(Activity Cost Pool) Driver Rounded Edge Squared Edge TotalSupervision Direct labor cost ($) $ 6,100 $ 11,800 $ 17,900 Depreciation of machinery Machine hours 300 hours 600 hours 900 hoursAssembly line preparation Setups (number) 30 times 93 times 123 times1. Assign these three overhead cost pools to each of the two products using ABC. (Do not round your intermediate calculations and round final answers to the nearest dollar amount. Omit the "$" sign in your response.)Product Assigned CostRounded edge $Squared edge $2. Determine average cost per foot for each of the two products using ABC. (Do not round your intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)Rounded edge Squared edgeAverage cost per foot (ABC) $ $3.value:1.00 pointsBelow are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect.BEST GUITARDepartmental Income StatementsFor Year Ended December 31, 2011Acoustic Electric Sales $ 103,400 $ 83,600 Cost of goods sold 44,575 47,350 Gross profit 58,825 36,250 Operating expenses Advertising expense 5,045 4,290 Depreciation expense-equipment 10,120 8,510 Salaries expense 19,500 17,700 Supplies expense 1,990 1,730 Rent expense 7,055 5,960 Utilities expense 2,955 2,640 Total operating expenses 46,665 40,830 Net income (loss) $ 12,160 $ (4,580 ) (1) Prepare a departmental contribution report that shows each department?s contribution to overhead. (Input all amounts as positive values. Omit the "$" sign in your response.)BEST GUITARDepartmental Contribution StatementsFor Year Ended December 31, 2011Acoustic Dept. Electric Dept. Combined


Paper#42108 | Written in 18-Jul-2015

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