Homework Answers
| The above interest costs would be considered a(n) product-sustaining cost. |
| A product-sustaining cost supports a product or division regardless of units of product produced. |
| Product-sustaining cost should be allocated to individual products. |
| Option B is correct |
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The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $15,000,000...
The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $20,000,000...
The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $20,000,000 bond issuance, the Electric Mixer Division used $14,000,000 and the Electric Lamp Division used $6,000,000 for expansion. The Electric Mixer Division has $10,000,000 of revenue, the Electric Lamp Division has $6,000,000 of revenues Interest costs on the bond totaled $1,500,000 for the year. What amount of interest costs should be allocated to the Electric Mixer Division based on their usage of the bond proceeds...
The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $13,000,000...
The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $13,000,000 bond issuance, the Electric Mixer Division used $9,500,000 and the Electric Lamp Division used $3,500,000 for expansion. Interest costs on the bond totaled $975,000 for the year. What amount of interest costs should be allocated to the Electric Mixer Division? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar.) A) $563,333 B) $711,750 C) $3,500,000 D) $9,500,000
3.) The Electric Parts Division of Babylon Corporation has recently made a proposal to Cable division....
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Roberta, Inc., manufactures elliptical machines for several well-known companies. The machines differ significantly in their complexity...
Roberta, Inc., manufactures elliptical machines for several
well-known companies. The machines differ significantly in their
complexity and their manufacturing batch sizes. The following costs
were incurred in 2017:
Requirement 1. Classify each of the preceding
costs as output unit-level, batch-level, product-sustaining, or
facility-sustaining. Explain each answer (answer options
are in bold on the cost-type row pick one).
Cost Item
Cost Type
a. Indirect manufacturing labor costs such as
supervision that supports direct manufacturing labor,
$935,000
(Batch Level, Facility-sustaining, Output unit-level,...
Gibson Company has two divisions, A and B. Division A manufactures 6,000 units of product per...
Gibson Company has two divisions, A and B. Division A manufactures 6,000 units of product per month. The cost per unit is calculated as follows. Variable costs Fixed costs Total cost $ 6.30 20.60 $26.90 Division B uses the product created by Division A. No outside market for Division A's product exists. The fixed costs incurred by Division A are allocated headquarters-level facility-sustaining costs. The manager of Division A suggests that the product be transferred to Division B at a...
Franklin Company has two divisions, A and B. Division A manufactures 5,600 units of product per month. The cost per...
Franklin Company has two divisions, A and B. Division A manufactures 5,600 units of product per month. The cost per unit is calculated as follows. Variable costs Fixed costs Total cost $ 5.20 19.90 $26.10 Division B uses the product created by Division A. No outside market for Division A's product exists. The fixed costs incurred by Division A are allocated headquarters-level facility Sustaining costs. The manager of Division A suggests that the product be transferred to Division B at...
Watson Inc. is a manufacturing company operating in the southeastern United States. The company has three...
Watson Inc. is a manufacturing company operating in the southeastern United States. The company has three primary product lines, as well as several "secondary" lines. The company's controller is in the process of preparing the annual financial statements and will need to classify the following cost objects as either product costs or period costs. For each of these costs, determine the amounts that will be considered product costs versus the amounts that will be considered period costs and enter them...
Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has...
Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $50 per machine hour, while the Sanding Department uses a departmental overhead rate of $30 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments: Assembly Department Sanding Department Actual results Direct labor hours used Machine hours used 10 o The...
Recently Ryan Smith, the plant manager of the manufacturing division of Waterways Corporation, has been focusing...
Recently Ryan Smith, the plant manager of the manufacturing division of Waterways Corporation, has been focusing on changes to overhead costs. He realizes that Ben Clark's new designs call for more automation in the plant, but he is also investigating if there are any opportunities for cost savings. Ryan thought it might be helpful to his cost-cutting measures if he could predict what manufacturing overhead would be in the following months. But first he needed to determine the appropriate activity...
The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $20,000,000 bond issuance, the Electric Mixer Division used $14,000,000 and the Electric Lamp Division used $6,000,000 for expansion. The Electric Mixer Division has $10,000,000 of revenue, the Electric Lamp Division has $6,000,000 of revenues Interest costs on the bond totaled $1,500,000 for the year. What amount of interest costs should be allocated to the Electric Mixer Division based on their usage of the bond proceeds...
Roberta, Inc., manufactures elliptical machines for several
well-known companies. The machines differ significantly in their
complexity and their manufacturing batch sizes. The following costs
were incurred in 2017:
Requirement 1. Classify each of the preceding
costs as output unit-level, batch-level, product-sustaining, or
facility-sustaining. Explain each answer (answer options
are in bold on the cost-type row pick one).
Cost Item
Cost Type
a. Indirect manufacturing labor costs such as
supervision that supports direct manufacturing labor,
$935,000
(Batch Level, Facility-sustaining, Output unit-level,...
Gibson Company has two divisions, A and B. Division A manufactures 6,000 units of product per month. The cost per unit is calculated as follows. Variable costs Fixed costs Total cost $ 6.30 20.60 $26.90 Division B uses the product created by Division A. No outside market for Division A's product exists. The fixed costs incurred by Division A are allocated headquarters-level facility-sustaining costs. The manager of Division A suggests that the product be transferred to Division B at a...
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Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $50 per machine hour, while the Sanding Department uses a departmental overhead rate of $30 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments: Assembly Department Sanding Department Actual results Direct labor hours used Machine hours used 10 o The...
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