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M8 CHP 12 5 PRB Cost Allocation

The document provides information about the costs of maintenance and power support departments at Parat College for May 2008. The maintenance department incurred costs of $60,000 and provided 10% of its services to the power department. The power department incurred costs of $40,000 and provided varying percentages of services to the maintenance department and different schools. The question asks what amount of the support department costs was allocated to the School of Education, which received 30% of maintenance services and 20% of power services.

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69 views2 pages

M8 CHP 12 5 PRB Cost Allocation

The document provides information about the costs of maintenance and power support departments at Parat College for May 2008. The maintenance department incurred costs of $60,000 and provided 10% of its services to the power department. The power department incurred costs of $40,000 and provided varying percentages of services to the maintenance department and different schools. The question asks what amount of the support department costs was allocated to the School of Education, which received 30% of maintenance services and 20% of power services.

Uploaded by

IT GAMING
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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558535763.doc.

Page 1 of 2
Error: Reference source not found Parat College allocates support department costs to its individual schools using the step
method.
Information for May 2008 is as follows:
Support departments
Maintenance Power
Costs incurred $60,000 $40,000
Service percentages provided to:
Maintenance -- 10%
Power 20% --
School of Education 30% 20%
School of Technology 50% 70%
100% 100%
What is the amount of May 2008 support department costs allocated to the School of Education?
a. $29,556 b $30, 382 c. $70,444 d. $49,125

ERROR: REFERENCE SOURCE NOT FOUND Parat College allocates support department costs to its individual schools
using the direct method. Information for May 2008 is as follows:
Support departments
Maintenance Power
Costs incurred $60,000 $40,000
Service percentages provided to:
Maintenance -- 10%
Power 20% --
School of Education 30% 20%
School of Technology 50% 70%
100% 100%
What is the amount of May 2008 support department costs allocated to the School of Education?
a. $40,500 b $42,120 c. $46,100 d. $31,389

ERROR: REFERENCE SOURCE NOT FOUND Lee Co. produces two joint products, BEX and ROM. Joint production
costs for June were $30,000. During June further processing costs beyond the split-off point, needed to convert the products
into salable form, were $35,000 and $25,000 for 1,600 units of BEX and 800 units of ROM, respectively. BEX sells for $50
per unit, and ROM sells for $100 per unit. Lee uses the net realizable value method for allocating joint product costs. For
June, the joint costs allocated to product ROM were
a. $20,000 b $16,500 c. $13,500 d. $10,000

Error: Reference source not found Lite Co. manufactures products X and Y from a joint process that also yields a by-
product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional information is as follows:
Products
X Y Z TOTAL
Units produced 20,000 20,000 10,000 50,000
Joint costs ? ? ? $300,000
Sales value at split- off $300,000 $150,000 $30,000 $480,000
Joint costs were allocated using the sales value at split-off approach.
The joint costs allocated to Product Y were
a. $ 84,000 b $90,000 c. $100,000 d. $168,000

ERROR: REFERENCE SOURCE NOT FOUND Lane Co. produces main products Kul and Wu. The process also yields
by-product Zef. Net realizable value of by-product Zef is subtracted from joint production cost of Kul and Wu. The following
information pertains to production in July at a joint cost of $54,000:
Product Units produced Market value Additional cost after split-off
Kul 1,000 $40,000 $0
Wu 1,500 35,000 0
Zef 500 7,000 4,000
If Lane uses the net realizable value method for allocating joint cost, how much of the joint cost should be allocated to product
Kul?
558535763.doc. Page 2 of 2
a. $18,800 b $20,000 c. $26,667 d. $27,200

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