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##### acct 212 home work 4 chapter 21

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Question;acct 212 home work 4 chapter 211.;award:3.38 out of;4.50 points;Exercise 21-2 Activity-based costing of overhead L.O. P2;Pane;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;$;9,700;$;21,700;$;31,400;Direct;labor;6,100;11,900;18,000;Overhead;(300% of direct labor cost);18,300;35,700;54,000;Total;cost;$;34,100;$;69,300;$;103,400;Quantity;produced;10,700;ft.;14,200;ft.;Average;cost per ft.;$;3.19;$;4.88;Pane?s;controller wishes to apply activity-based costing (ABC) to allocate the;$54,000 of overhead costs incurred by the two product lines to see whether;cost per foot would change markedly from that reported above. She has;collected the following information.;Overhead;Cost Category (Activity Cost Pool);Cost;Supervision;$;2,160;Depreciation;of machinery;28,840;Assembly;line preparation;23,000;Total;overhead;$;54,000;She has;also collected the following information about the cost drivers for each;category (cost pool) and the amount of each driver used by the two product;lines.;Usage;Overhead;Cost Category;(Activity Cost Pool);Driver;Rounded Edge;Squared Edge;Total;Supervision;Direct;labor cost ($);$;6,100;$;11,900;$;18,000;Depreciation;of machinery;Machine;hours;200;hours;700;hours;900;hours;Assembly;line preparation;Setups;(number);31;times;95;times;126;times;1.;Assign;these three overhead cost pools to each of the two products using ABC. (Do not round your intermediate calculations and round;final answers to the nearest dollar amount. Omit the "$" sign in;your response.);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 "$" sign in your response.);eBook LinkView Hint #1;Worksheet;Difficulty: Hard;Exercise 21-2 Activity-based costing of overhead L.O. P2;Learning Objective: 21-P2 Assign overhead costs using activity-based;costing.;2.;award:4.50 out of;4.50 points;Exercise 21-5 Service department expenses allocated to operating;departments L.O. P3;Advertising;and purchasing department expenses of Bookworm Bookstore are allocated to;operating departments on the basis of dollar sales and purchase orders;respectively. Information about the allocation bases for the three operating;departments follows.;Department;Sales;Purchase Orders;Books;$;449,000;423;Magazines;144,000;310;Newspapers;208,000;265;Total;$;801,000;998;Complete;the following table by allocating the expenses of the two service departments;(advertising and purchasing) to the three operating departments. (Negative amounts should be indicated by a minus sign. Do;not round your intermediate percentages of expense allocation and round;intermediate dollar amounts and final answers to the nearest whole number.;Omit the "$" sign in your response.);eBook LinkView Hint #1;Worksheet;Difficulty: Hard;Exercise 21-5 Service department expenses allocated to operating;departments L.O. P3;Learning Objective: 21-P3 Prepare departmental income statements and;contribution reports.;3.;award:4.50 out of;4.50 points;Exercise 21-6 Indirect payroll expense allocated to departments L.O. C1;Monica;Gellar works in both the jewelry department and the hosiery department of a;retail store. Gellar assists customers in both departments and arranges and;stocks merchandise in both departments. The store allocates Gellar?s $20,000;annual wages between the two departments based on a sample of the time worked;in the two departments. The sample is obtained from a diary of hours worked;that Gellar kept in a randomly chosen two-week period. The diary showed the;following hours and activities spent in the two departments.;Selling;in jewelry department;64 hours;Arranging;and stocking merchandise in jewelry department;6 hours;Selling;in hosiery department;12 hours;Arranging;and stocking merchandise in hosiery department;12 hours;Idle;time spent waiting for a customer to enter one of the selling departments;4 hours;Allocate;Gellar?s annual wages between the two departments. (Round;your percentage answers to 1 decimal place. Omit the "$;%" signs in your response.);Hours Worked;% of Total;Cost;Jewelry;Dept.;70;74.5 %;$ 14,900;Hosiery;Dept.;24;25.5;5,100;Totals;94;100.0 %;$ 20,000;eBook LinkView Hint #1;Worksheet;Difficulty: Hard;Exercise 21-6 Indirect payroll expense allocated to departments L.O.;C1;Learning Objective: 21-C1 Distinguish between direct and indirect;expenses and identify bases for allocating indirect expenses to departments.;4.;award:4.50 out of;4.50 points;Exercise 21-8 Investment center analysis L.O. A1;You;must prepare a return on investment analysis for the regional manager of;Out-and-In Burgers. This growing chain is trying to decide which outlet of;two alternatives to open. The first location (A) requires a $500,000;investment and is expected to yield annual net income of $75,000. The second;location (B) requires a $200,000 investment and is expected to yield annual;net income of $44,000.;Compute;the return on investment for each Out-and-In Burgers alternative. (Omit the "%" sign in your response.);eBook LinkView Hint #1;Worksheet;Difficulty: Medium;Exercise 21-8 Investment center analysis L.O. A1;Learning Objective: 21-A1 Analyze investment centers using return on;assets, residual income, and balanced scorecard.;5.;award:5 out of;5.00 points;Exercise 21-9 Computing performance measures L.O. A1;Comart;a retailer of consumer goods, provides the following information on two of;its departments (each considered an investment center).;Investment Center;Sales;Net;Income;Average;Invested Assets;Electronics;$;10,600,000;$;586,500;$;3,450,000;Sporting;goods;9,000,000;896,000;5,600,000;(1.1);Compute;return on investment for each department. (Do;not round your intermediate calculations and round your final answers to the;nearest whole percentages. Omit the "%" sign in your response.);(1.2);Using;return on investment, which department is most efficient at using assets to;generate returns for the company?;Electronics;(2.1);Assume;a target income level of 11.7% of average invested assets. Compute residual;income for each department. (Omit the;$" sign in your response.);(3);Assume;that the Electronics department is presented with a new investment;opportunity that will yield a 15% return on assets. (Assume a target income;level of 11.7% of average invested assets.) Should the new investment;opportunity be accepted?;6.;award:4.50 out of;4.50 points;Exercise 21-10 Computing performance measures L.O. A2;Comart;a retailer of consumer goods, provides the following information on two of;its departments (each considered an investment center).;Compute;profit margin for each department. (Round;your answers to 2 decimal places. Omit the "%" sign in your;response.);Compute;investment turnover for each department. (Round;your answers to 2 decimal places.);eBook LinkView Hint #1;Worksheet;Difficulty: Medium;Exercise 21-10 Computing performance measures L.O. A2;Learning Objective: 21-A2 Analyze investment centers using profit;margin and investment turnover.;7.;award:4.50 out of;4.50 points;Exercise 21-12A Determining transfer prices L.O. C3;The;Trailer department of Soni Bicycles makes bike trailers that attach to;bicycles and can carry children or cargo. The trailers have a retail price of;$99 each. Each trailer incurs $37 of variable manufacturing costs. The;Trailer department has capacity for 27,000 trailers per year, and incurs;fixed costs of $540,000 per year.;Required;1.;Assume;the Assembly division of Soni Bicycles wants to buy 5,600 trailers per year;from the Trailer division. If the Trailer division can sell all of the trailers;it manufactures to outside customers, what price should be used on transfers;between Soni Bicycle?s divisions? (Omit the;$" sign in your response.);2.;Assume;the Trailer division currently only sells 10,700 trailers to outside;customers, and the Assembly division wants to buy 5,600 trailers per year;from the Trailer division. What is the range of acceptable prices that could;be used on transfers between Soni Bicycle?s divisions? (Omit the "$" sign in your response.);3.;Assume;transfer prices of either $37 per trailer or $67 per trailer are being;considered. What will be the range of transfer price by which the top;management of Soni Bicycle's will be indifferent? (Omit the "$" sign in your response.);8.;award:0 out of;4.50 points;Exercise 21-13B Joint real estate costs assigned L.O. C4;Tidy;Home Properties is developing a subdivision that includes 460 home lots. The;210 lots in the Garden section are below a ridge and do not have views of the;neighboring gardens and hills, the 250 lots in the Premier section offer;unobstructed views. The expected selling price for each Garden lot is $54,000;and for each Premier lot is $100,000. The developer acquired the land for;$1,900,000 and spent another $2,900,000 on street and utilities improvements.;Assign;the joint land and improvement costs to the lots using the value basis of;allocation and determine the average cost per lot. (Round your intermediate calculations to nearest whole;percent. Round your answers to nearest dollar amount. Omit the;$" sign in your response.);9.;award:4.50 out of;4.50 points;Exercise 21-15 Profit margin and investment turnover L.O. A2;L?Oreal;reports the following for a recent year for the major divisions in its;Cosmetics branch.;(?;millions);Sales;Income;Total Assets;End of Year;Total Assets;Beginning of Year;Professional;products;?;2,477;?;520;?;2,506;?;2,430;Consumer;products;8,356;1,577;5,486;5,351;Luxury;products;4,171;765;4,049;2,685;Active;cosmetics;1,290;258;807;808;Total;?;16,294;?;3,120;?;12,848;?;11,274;1.1;Compute;profit margin for each division. (Round your;answers to 2 decimal places. Omit the "%" sign in your response.);1.2;Which;L?Oreal division has the highest profit margin?;2.1;Compute;investment turnover for each division. (Do;not round intermediate calculations and round your final answers to 2 decimal;places.);2.2;Which;L?Oreal division has the best investment turnover?;eBook LinkView Hint #1;Worksheet;Difficulty: Hard

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