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Managerial Accounting 1B Ch22

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Question;Managerial Accounting 1B;Financial;and Managerial Accounting;Chapter 22;1.;Exercise 22-1 Departmental expense;allocations L.O. C1;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;Base;Supervision;$;75,000;Number of employees;Utilities;60,000;Square feet occupied;Insurance;16,500;Value of assets in use;Total;$;151,500;Departmental data for the;company?s recent reporting period follow.;Department;Employees;Square;Feet;Asset;Values;Materials;18;27,000;$;6,000;Personnel;6;4,500;1,200;Manufacturing;66;45,000;37,800;Packaging;30;13,500;15,000;Total;120;90,000;$;60,000;(1);Use this information to allocate;each of the three indirect expenses across the four departments.(Omit the "$" & "%" signs in your;response.);(2);Prepare a summary table that;reports the indirect expenses assigned to each of the four departments.(Omit the "$" sign in your response.);2.;Exercise 22-12B Joint real estate costs assigned L.O. C4;Tidy Home Properties is developing;a subdivision that includes 300 home lots. The 225 lots in the Garden section;are below a ridge and do not have views of the neighboring gardens and hills;the 75 lots in the Premier section offer unobstructed views. The expected;selling price for each Garden lot is $50,000 and for each Premier lot is;$100,000. The developer acquired the land for $2,500,000 and spent another;$2,000,000 on street and utilities improvements.;Assign the joint land and;improvement costs to the lots using the value basis of allocation and;determine the average cost per lot. (Omit the;$" sign in your response.);Exercise 22-13B Joint product costs assigned L.O. C4;[The following information applies to the questions displayed;below.];Pike Seafood Company purchases;lobsters and processes them into tails and flakes. It sells the lobster tails;for $20 per pound and the flakes for $15 per pound. On average, 100 pounds of;lobster are processed into 57 pounds of tails and 24 pounds of flakes, with;19 pounds of waste. Assume that the company purchased 3,000 pounds of lobster;for $6.00 per pound and processed the lobsters with an additional labor cost of;$1,800. No materials or labor costs are assigned to the waste. The company;sold 1,510 pounds of tails and 710 pounds of flakes.;3.Exercise 22-13B;Part 1;(1);What is the allocated cost of the;sold items? The company allocates joint costs on a value basis.(Round your cost per pound to 2 decimal places. Omit the;$" sign in your response.);Cost;of goods sold;Lobster tails;Lobster flakes;4.;Exercise 22-13B Part 2;(2);What is the allocated cost of the;ending inventory? The company allocates joint costs on a value basis.(Round your cost per pound to 2 decimal places. Omit the;$" sign in your response.);Cost;of the ending inventory;Lobster tails;Lobster flakes;Problem 22-1A Allocation of building occupancy costs to;departments L.O. P1;[The following information applies to the questions displayed;below.];City Bank has several departments;that occupy both floors of a two-story building. The departmental accounting;system has a single account, Building Occupancy Cost, in its ledger. The;types and amounts of occupancy costs recorded in this account for the current;period follow.;Depreciation?Building;$;18,000;Interest?Building;mortgage;27,000;Taxes?Building and;land;8,000;Gas (heating) expense;2,500;Lighting expense;3,000;Maintenance expense;5,500;Total occupancy cost;$;64,000;The building has 4,000 square feet;on each floor. In prior periods, the accounting manager merely divided the;$64,000 occupancy cost by 8,000 square feet to find an average cost of $8 per;square foot and then charged each department a building occupancy cost equal;to this rate times the number of square feet that it occupied.;Laura Diaz;manages a first-floor department that occupies 1,000 square feet, and Lauren;Wright manages a second-floor department that occupies 1,800 square feet of;floor space. In discussing the departmental reports, the second-floor manager;questions whether using the same rate per square foot for all departments;makes sense because the first-floor space is more valuable. This manager also;references a recent real estate study of average local rental costs for;similar space that shows first-floor space worth $30 per square foot and;second-floor space worth $20 per square foot (excluding costs for heating;lighting, and maintenance).;5.;Problem 22-1A Part 1;Required;1.;Allocate occupancy costs to the;Diaz and Wright departments using the current allocation method.(Omit the "$" sign in your response.);Department;Total;Diaz?s Dept.;Wright's Dept.;6.;Problem 22-1A Part 2;2.;Allocate the depreciation;interest, and taxes occupancy costs to the Diaz and Wright departments in;proportion to the relative market values of the floor space. Allocate the;heating, lighting, and maintenance costs to the Diaz and Wright departments;in proportion to the square feet occupied (ignoring floor space market;values).(Round your cost per Sq. ft rate to;2 decimal places and final answers to the nearest whole number. Omit the;$" sign in your response.);Department;Total;Diaz?s Dept.;$;Wright's Dept.;$;8.;Problem 22-3A;Departmental income statements, forecasts L.O. P1;Time-To-See Company began;operations in January 2011 with two operating (selling) departments and one;service (office) department. Its departmental income statements follow.;Time-To-See plans to open a third;department in January 2012 that will sell paintings. Management predicts that;the new department will generate $35,000 in sales with a 55% gross profit;margin and will require the following direct expenses: sales salaries;$8,000, advertising, $800, store supplies, $500, and equipment depreciation;$200. It will fit the new department into the current rented space by taking;some square footage from the other two departments. When opened the new;painting department will fill one-fifth of the space presently used by the;clock department and one-sixth used by the mirror department. Management does;not predict any increase in utilities costs, which are allocated to the;departments in proportion to occupied space (or rent expense). The company;allocates office department expenses to the operating departments in;proportion to their sales. It expects the painting department to increase total;office department expenses by $7,000. Since the painting department will;bring new customers into the store, management expects sales in both the;clock and mirror departments to increase by 7%. No changes for those;departments? gross profit percents or their direct expenses are expected;except for store supplies used, which will increase in proportion to sales.;Required;Prepare departmental income;statements that show the company?s predicted results of operations for;calendar year 2012 for the three operating (selling) departments and their;combined totals. (Input all amounts as;positive values. Round your percentage values to 1 decimal place;intermediate and final answers to the nearest whole dollar amount. Omit;the "$" sign in your response.);rev: 05_12_2012

 

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