Homework Answers
True
Support department cost allocations are necessary for production departments in order to reflect the product cost accurately. Treating support department costs as facility level costs will not lead to allocation of overheads to production department. hence it may lead to inaccurate product costs. Hence answer is true
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If a company considers support department costs to be facility-level costs, product costs may be inaccurate...
Airco Company is tempted to consider support department costs to be facility-level costs that do not need to be applied...
Airco Company is tempted to consider support department costs to be facility-level costs that do not need to be applied to products. Which of the following explains what is misguided about this approach? Product costs may be inaccurate because straight-line depreciation on factory equipment is treated as a genera and administrative expense on the income statement. Product costs may be inaccurate because support department services may be used more heavily by some products than others. Product costs may be inaccurate...
Which of the following methods of cost allocation is not one of the four common methods...
Which of the following methods of cost allocation is not one of the four common methods used to allocate the joint costs incurred in a production process? a. Market value at split-off method b. Weighted average method c. Net realizable value method d. Reciprocal services method ------------------------ Which of the following is not a support department? a. The department that produces pizza boxes in a paper container manufacturing facility b. The Janitorial Department in a plastic salad container manufacturing facility...
When a single plantwide overhead rate is used to apply overhead to products, support department costs...
When a single plantwide overhead rate is used to apply overhead to products, support department costs are a.impossible to trace. b.allocated with multiple drivers using a single rate. c.nonexistent, because a single plantwide rate cannot be used when a company has support departments. d.combined with all other overhead costs. Which of the following statements regarding direct costs is true? a.All direct costs of a support department are accumulated in the department, and general factory overhead is never assigned to the...
Which of the following statements concerning the use of support department and joint cost allocations for...
Which of the following statements concerning the use of support department and joint cost allocations for performance evaluations is not true? a. A manager may not be responsible for the allocation of support department costs if he or she cannot control the square footage of the areas upon which cost allocations are based. b. A manager may miss a performance target because direct materials costs are too high. c. A manager may miss a performance target because he or she...
When activity-based costing is used to apply overhead to products, support department costs are referred to...
When activity-based costing is used to apply overhead to products, support department costs are referred to as a.department activity costs b.support activity costs c.activity-based department costs d.multiple activity costs In the process of applying overhead using multiple production department rates, overhead costs are directly traced to support and production departments and are then allocated to production departments based on the amount of support activity used by each department. True False The physical units method and the weighted average method are...
Product costs include direct materials, direct labor, and selling costs. True False Period costs are all...
Product costs include direct materials, direct labor, and selling costs. True False Period costs are all costs that are not product costs, such as office supplies. True False A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned. True False The valve chain is the set of activities that increase the value of an organization's product and services. True False Direct costs can be economically and easily traced...
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the...
Jamison Company uses the reciprocal services method to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following information: Janitorial Department Usage Cafeteria 50% Cutting 10% Assembly 40% Cafeteria Department Usage Janitorial Cutting Assembly 20% 60% 20% Janitorial Department costs are $450,000. Cafeteria Department costs are $250,000. What is the total Janitorial Department cost using the reciprocal services method? Round your answer to...
1. Design costs are an example of: a) unit-level costs b) product-sustaining costs c) facility-sustaining costs...
1. Design costs are an example of: a) unit-level costs b) product-sustaining costs c) facility-sustaining costs d) batch-level costs 2. A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. Of the following, the MOST appropriate cost driver for assigning materials handling costs to the various products is: a) number of parts used b) number of suppliers involved c) number of units produced d) direct labor hours 3. A well-designed, activity-based cost system helps...
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the...
Jamison Company uses the reciprocal services method to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following formation: Janitorial Department Usage Cafeteria Cutting Assembly Cafetena Department Usage Janitorial Cutting Assembly Janitorial Department costs are $450,000 Cafeteria Department costs are $250,000 What are the correct equations to represent the total Janitorial) costs, (b) the total cafeteria (C) costs, and (c) the rewritten equation...
Jamison Company uses the reciprocal services metjod to allocate support department costs and has gathered the...
Jamison Company uses the reciprocal services metjod to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following information: Janitorial Department Usage Cafeteria Cutting 50% 10% Assembly 40% Cafeteria Department Usage Janitorial Cutting Assembly 20% 60% 20% Janitorial Department costs are $450,000. Cafeteria Department costs are $250,000 What are the correct equations to represent (a) the total Janitorial (3) costs, (b) the total...
Jamison Company uses the reciprocal services method to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following information: Janitorial Department Usage Cafeteria 50% Cutting 10% Assembly 40% Cafeteria Department Usage Janitorial Cutting Assembly 20% 60% 20% Janitorial Department costs are $450,000. Cafeteria Department costs are $250,000. What is the total Janitorial Department cost using the reciprocal services method? Round your answer to...
Jamison Company uses the reciprocal services method to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following formation: Janitorial Department Usage Cafeteria Cutting Assembly Cafetena Department Usage Janitorial Cutting Assembly Janitorial Department costs are $450,000 Cafeteria Department costs are $250,000 What are the correct equations to represent the total Janitorial) costs, (b) the total cafeteria (C) costs, and (c) the rewritten equation...
Jamison Company uses the reciprocal services metjod to
allocate support department costs and has gathered the following
information:
Jamison Company uses the reciprocal services method to allocate support department costs and has gathered the following information: Janitorial Department Usage Cafeteria Cutting 50% 10% Assembly 40% Cafeteria Department Usage Janitorial Cutting Assembly 20% 60% 20% Janitorial Department costs are $450,000. Cafeteria Department costs are $250,000 What are the correct equations to represent (a) the total Janitorial (3) costs, (b) the total...
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