Myaccounungtan Problems 15-27 Single-rate, dual-rate, and practical capacity all
ID: 2585005 • Letter: M
Question
Myaccounungtan Problems 15-27 Single-rate, dual-rate, and practical capacity allocation. Perfection Department Store has a new promotional program that offers a free gift-wrapping service for its service department has practical capacity to wrap 7,000 gifts at a budgeted fixed cost of $6.650 each month. The budgeted variable cost to gift wrap an item is $0.40. Although the se tomers, a gift-wrapping service cost allocation is m chased. The customer-service department reported the following for the most recent month customers. Perfection's customer- rvice is free to cus- ade to the department where the item was pur Home Page Budgeted Practical Capacity Number of Gifts to Be Wrapped 2.470 825 Available for Gift-Wrapping 2,640 945 1,970 650 795 Actual Number of Gifts 2 Women's face wash 2020 3 Men's face wash 4Fragrances S Body wash 6 Hair products 730 1.560 545 1495 1,805 430 1120 Total 1. Using the single-rate method, allocate gift -wrapping costs to different departments in these three ways. Required a. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate b. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate c. Calculate the budgeted rate based on the practical gift-wrapping capacity available and allocate costs based on the budgeted use (of gift-wrapping services. costs based on actual usage costs based on actual usage.
Explanation / Answer
As per policy, we are allowed to answer one one question, so answering 15-27 :
15-27)
Budgeted rate based on the budgeted number of gifts to be wrapped = Budgeted fixed cost / Budgeted number of gifts to be wrapped = $6650 / 6650 = $1/Gift wrapped .
a) Allocation of cost based on budgeted use :
Women’s face wash
Men’s face wash
Fragrances
Body wash
Hair products
Total
b) Allocation of cost based on actual usage :
Women’s face wash
Men’s face wash
Fragrances
Body wash
Hair products
Total
Budgeted rate based on the practical gift wrapping capacity = Budgeted fixed cost / Total practical gift wrapping capacity = $6650 / 7000 = $0.95/Gift wrapped .
c) Allocation of cost based on actual usage :
Women’s face wash
Men’s face wash
Fragrances
Body wash
Hair products
Total
Budgeted Number of Gifts to be Wrapped (A) Cost Allocation (A * $1)Women’s face wash
2470 $2470Men’s face wash
825 $825Fragrances
1805 $1805Body wash
430 $430Hair products
1120 $1120Total
6650 $6650Related Questions
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