Managerial Accounting 1B Ch22

Question
Managerial Accounting 1B

Financial and Managerial Accounting

Don't use plagiarized sources. Get Your Custom Essay on
Managerial Accounting 1B Ch22
Just from $13/Page
Order Essay

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 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

My Essay Gram
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

Live Chat+1(405) 367-3611Email