Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and P2)....
Evergreen Company has two support departments (S1 and S2) and
two producing departments (P1 and P2). Department S1 costs are
allocated on the basis of number of employees, and Department S2
costs are allocated on the basis of space occupied expressed in
square feet.
Data on direct department costs, number of employees, and space
occupied are as follows:
|
S1 |
S2 |
P1 |
P2 |
|
|
Direct dept. costs |
$7,500 |
$11,000 |
$27,500 |
$30,000 |
|
Number of employees |
10 |
5 |
20 |
25 |
|
Space occupied (sq. ft.) |
1,000 |
500 |
1,500 |
2,500 |
If Evergreen uses the direct method, the ratio representing the
portion of Department S2 allocated to P1 is
a.1,500/5,500.
b.1,500/5,000.
c.1,500/2,000.
d.1,500/4,000.
Algonquin Products produces two products, X and Y, in a single
process. In 2011, the joint costs of this process were $25,000. In
addition, 4,000 units of X and 6,000 units of Y were produced.
Separable processing costs beyond the split-off point were
X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for
$7.50 per unit.
What is the gross profit of product Y assuming the net realizable
value method is used?
a.$16,364
b.$13,636
c.$45,000
d.$30,000
Homework Answers
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