Question

PROBLEMS LO 12-1, 122, 123 connect All applicable Problems we valable in Connect. Problem 12-14 Cost accumulation and allocation Yalland Manufacturing Company makes twofferent pros M N 'The party's two depart iments are named after the products, for example Product M is made in Department M. Yald's countant has identified the following annual c i med with these products $160,000 Financial data Salary of vice president of production division Salary of supervisor Department Salary of supervisor Department N Direct cost Department M Direct les cost Department N Direct labor cost Department Direct labor cost Department Direct utilities Cost Department M Direct uits cost Department Gener Factorywide uttes Production supplies Fringe benefits 24.000 36.000 138.000 600,000 Nonfinancial data Machine hours Department Machine hours Department 5,000 1,000 " Required a. Identify the costs that are (1) direct costs of Department M. (2) direct costs of Department N. and (3) indirect costs. b. Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M and N (ə) Total Indirect Costs P12-14 Cost Accumulation & Allocation (In-class learning activity: 01/21/2020) Direct Costs Dept Dept N Salary of VP of Prodn division $160,000 Salary of supervisor - Dept M 80,000 Salary of supervisor - Dept N 60,000 Direct materials cost-Dept M 300,000 Direct materials cost-Dept N 420,000 Direct labor cost-Dept M 240,000 Direct labor cost-Dept N 680,000 Direct utilities cost-Dept M 120,000 Direct utilities cost-Dept N 24,000 General factorywide utilities 36,000 Porduction supplies 36,000 Fringe benefits 138,000 Depreciation 600,000 Total $2.894.000

Answer 1

Cost allocation. :- Direct cost Dept M Dept N Indirect cost Total. Salary of up of Roduction dept 160,000 160,000 80,000. 80,000 Salary of super visor of Dept M 60,000 60,000 Salary of super- vior of dept N 300,000 DM cost Dept M Dept N 300,000 420,000 420,000 2140,000 Direct Labor Dept M .. Dept N 240,00 690,00 680,000 Direet utitities Dept M 120,000 Dept N 120,000 24,000 24000 General factory wide utility 36000 36,000 Podduction Supplies 36000 36,00 Fringe benefit 138000 13800 Depreciation 600,000 600,00 TOTAL 6,60,0001124000 1110,000

NOTE: Galaug of Vice President & Supervisor are token as indirect assuming that their Salary payment do not vary with the porodution Volume allocate indirect cost is Cost driver to machine hours. Rate per hour = Total Indirect cost Total machine hours 11,10, DOO 6000 - $185 per hour. Indirect cost allocation. Department M-185 X 5000 925odo Department N = 185 X 1000 = 185,000

If you are benefited from the solution then please LIKE , if disliked please specify the reason.