stop down mmethod not direct method accounting system charged for the 3,000 cont
ID: 2396641 • Letter: S
Question
stop down mmethod not direct method
accounting system charged for the 3,000 control units if Wstanabe nses its tra b) tem proposed by Ms. Yamamoteo costs you think are most accurate, and explain w Compute the price charged for the 5,000 cantrol units if Waranahe uses the ABC n wlhy costs are different in the two costing systems. Include an indication of s 4. Explain why costs are sum S-A DIRECT ?METHOD FOR SFRVICE DEPARTMENT ALLOCATION who Instruments. In addition, there are two service departinents, Building Seri ompany has two producing departments, Mechanical Instrument ind Materials Receiving and Handling. The company purchases a variety of compo n which the departements assemble instruments for sile in domesihe sand n The Electronic Instruments division is highly automated. The manufacturing parts from tional markets. depend primarily on the number uf subcomponents in each instrument. In contras, techanical Instruments division relies primarily on a large labour force to hand-aeemi instruments. Its costs depend on direct-labour-hours The costs of Building Services depend primarily on the square metres occupied. Ti costs of Materials Receiving and Handling depend primarily on the rotal number of conpu nents handled. Instruments MI and M2 are produced in the Mechanical Instruments department.a EI and E2 are produced in the Electronic Instruments departnent. Data for these produn follow: Direct Materials CostNumber of Components Direct-Labour Bo 5-B2 AL VE MI M2 86 63 91 10 i5 Budget figures for 2012 include: Building Recciving and Mechanical Elec Service witExplanation / Answer
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Step-down method Service Departments Productive Departments Building Service Material receiving and handling Mechanical Instruments Electronic Instruments Department Costs 150000 120000 680000 348000 Building Service allocation -150000 9375 93750 46875 Balance 0 129375 773750 394875 Meterial receiving and handling allocation -129375 16172 113203 Total cost after allocation 0 789922 508078 Key Statistics: Square metres occupied 5000 50000 25000 Number of components handled 80000 560000 (8,000 x 10) (10,000 x 56)Related Questions
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