Project #25390 - Acct 631 Chapter 12 Homework

 

      Question #1

Wyoming Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller has compiled the following data for the year just ended.

  

  Department

Annual Cost

  Admissions

$

135,000

 

  Registrar

 

231,000

 

  Computer Services

 

488,000

 


  

  Division

Budgeted
Enrollment

Budgeted
Credit Hours

Planned Courses
Requiring Computer Work

  Liberal Arts

 

2,800

 

 

48,000

 

 

30

 

  Sciences

 

1,700

 

 

41,500

 

 

43

 

  Business Administration

 

1,600

 

 

35,500

 

 

42

 


  

Required:

 

1.

Distribute the departmental costs to the college’s three divisions based on the allocation base given.(Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

 

 

 

 

 

 

 
 

Division

 

Department and Allocation Base

Liberal Arts

Sciences

Business Administration

Total Cost Allocated

Admissions (enrollment)

       

Registrar (credit hours)

       

Computer Services (courses requiring computer)

       
       

 

2.

Choose the better allocation base for distributing the cost to the following departments:

 

 

 

 
 

Registrar

 

Computer Services

 

 

 

 

 

 

Question #2

Buckeye Department Stores, Inc., operates a chain of department stores in Ohio. The company’s organization chart appears below. Operating data for 20x5 follow.

  
Picture
   

 

BUCKEYE DEPARTMENT STORES, INC.
Operating Data for 20x5
(in thousands)

 

Columbus Division

 

 

 

  


 

 

 

 

 

Olentangy
Store

Scioto
Store

Downtown
Store

Cleveland Division
(total for all stores)

  Sales revenue

$

7,000

 

$

2,900

 

$

16,000

 

$

23,000

 

  Variable expenses:

 

 

 

 

 

 

 

 

 

 

 

 

     Cost of merchandise sold

 

4,000

 

 

2,500

 

 

6,000

 

 

16,000

 

     Sales personnel—salaries

 

700

 

 

340

 

 

730

 

 

1,400

 

     Sales commissions

 

50

 

 

40

 

 

100

 

 

250

 

     Utilities

 

80

 

 

60

 

 

170

 

 

300

 

     Other

 

70

 

 

55

 

 

140

 

 

300

 

  Fixed expenses:

 

 

 

 

 

 

 

 

 

 

 

 

     Depreciation—buildings

 

120

 

 

100

 

 

240

 

 

490

 

     Depreciation—furnishings

 

60

 

 

60

 

 

160

 

 

340

 

     Computing and billing

 

60

 

 

30

 

 

85

 

 

210

 

     Warehouse

 

50

 

 

60

 

 

210

 

 

470

 

     Insurance

 

60

 

 

45

 

 

100

 

 

250

 

     Property taxes

 

55

 

 

40

 

 

90

 

 

220

 

     Supervisory salaries

 

160

 

 

120

 

 

420

 

 

930

 

     Security

 

30

 

 

30

 

 

90

 

 

260

 


 

  

     The following fixed expenses are controllable at the divisional level: depreciation—furnishings, computing and billing, warehouse, insurance, and security. In addition to these expenses, each division annually incurs $40,000 of computing costs, which are not allocated to individual stores.

  

    The following fixed expenses are controllable only at the company level: depreciation—building, property taxes, and supervisory salaries. In addition to these expenses, each division incurs costs for supervisory salaries of $110,000, which are not allocated to individual stores.

  

    Buckeye Department Stores incurs common fixed expenses of $120,000, which are not allocated to the two divisions. Income-tax expense for 20x5 is $1,950,000.

  

Required:

 

1.

Prepare a segmented income statement for Buckeye Department Stores, Inc. (Enter your answers in thousands.)

      

2.

How would the segmented income statement help the president of Buckeye Department Stores manage the company?

 

 

 

It helps to ascertain the profitability of each division, which is more important than the rate of return on investment of the various segments.

It would help to gain insight into the performance of the individual stores and their divisions.

It helps to reallocate fixed expenses based on contribution margins of each segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question #3

Data Screen Corporation is a highly automated manufacturing firm. The vice president of finance has decided that traditional standards are inappropriate for performance measures in an automated environment. Labor is insignificant in terms of the total cost of production and tends to be fixed, material quality is considered more important than minimizing material cost, and customer satisfaction is the number one priority. As a result, production and delivery performance measures have been chosen to evaluate performance. The following information is considered typical of the time involved to complete and ship orders.

 

 

  Waiting time:

 

 

 

     From order being placed to start of production

 

12

 days

     From start of production to completion

 

11

 days

  Inspection time

 

2.8

 days

  Processing time

 

5.6

 days

  Move time

 

3.8

 days


 

Required:

1.

Calculate the manufacturing cycle efficiency. (Round your percentage answer to 1 decimal place. (i.e., 0.123 should be entered as 12.3))

 

 

 

 

 

Manufacturing cycle efficiency

 

%

 

       

 

2.

Calculate the delivery cycle time. (Round your answer to nearest whole number.)

 

 

 

 

Delivery cycle time

 

days

 

 

Subject Mathematics
Due By (Pacific Time) 03/26/2014 05:00 pm
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