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Question;Problem;10-21 Product versus general, selling;and administrative costs;The 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 are cash 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.;Required;Prepare an income statement, balance sheet;and statement of cash flows.Problem;11-23 Context-sensitive nature of cost;behavior classifications;Pacific Bank?s start-up division;establishes new branch banks. Each;branch opens with three tellers. Total;teller cost per branch is \$90,000 per year.;The three tellers combined can process up to 90,000 customer;transactions per year. IF a branch does;not attain a volume of at least 60,000 transactions during its first year of;operations, it is closed. If the demand;for services exceeds 90,000 transactions, and additional teller is hired, and;the branch is transferred from the start-up division to regular operations.;Required;a. 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 for;branch that processes, 60,000, 70,000, 80,000, or 90,000;transactions. In this case (the;activity base is the number of transactions for a specific branch), is;the teller cost a;fixed or a variable cost?;c. Determine the amount of teller cost in;total and the teller cost per branch for Pacific;Bank, assuming that the start-up division operates 10, 15, 20, or 25;branches. In this;case (the activity base is the number of branches), is the teller cost a;fixed or a variable;cost?Problem;12-15 Selecting an appropriate cost;driver (What is the base?);The Vest School of Vocational Technology;has organized the school training programs into three departments. Each department provides training in a;different area as follow: nursing assistant, dental hygiene, and office;technology. The school?s owner, Wilma;Vest, wants to know how much it costs to operate each of the three departments. To accumulate the total cost for each;department, the accountant has identified several indirect costs that must be;allocated to each. These costs are;\$10,080 of telephone expense, \$2,016 of supplies expense, \$720,000 of office;rent, \$144,000 of janitorial services, and \$150,000 of salary paid to the dean;of students. To provide a reasonably;accurate allocation of costs, the accountant has identified several possible;cost drivers. These drivers and their;association with each department follow.;Cost;Driver;Department;1;Department;2;Department;3;Number of telephones;28;32;52;Number of Faculty members;20;16;12;Square footage of office space;28,800;16,800;12,000;Number of secretaries;2;2;2;a. Identify the appropriate cost objects.;b. Identify the appropriate cost driver for;each indirect cost and compute the allocation;rate for assigning each indirect cost to the cost objects.;c. Determine the amount of telephone;expense that should be allocated to each of the;three 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 Department;1.;g. Identify two cost drivers not listed;here that could be used to allocate the cost of the;Dean?s salary to the three departments.

Paper#44092 | Written in 18-Jul-2015

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