Personal Finance Chapter 6 Paper
Jiambalvo 4edition
Chapter 6 Exercise 6.5
A. Suggest allocation bases to be used in allocating the service department costs to the two subsidiaries.
| |Service Departments |Allocations |
|1 |Human Resources ( hires employees and manages benefits) |# of employees |
|2 |Duplicating (performs copy services) |# of copies made |
|3 |Janitorial (provides routine cleaning services) |floor space |
|4 |Accounting (provides accounting services) |direct …show more content…
Custom Metal Works accountants determine that the following costs apply to the tables: Direct material: $100 Direct labor: 45 Manufacturing overhead: 70 Total: $ 215 (Note: Of the $ 70 of overhead, $14 is variable and $56 relates to fixed costs. The $56 of fixed overhead is allocated as $ 1.25 per direct labor dollar)
A. What will be the real effect on profit if the order is accepted?
| |Manufacture |Out-source |Difference |
|Units |3,000 |3,000 |
Chapter 6 Exercise 6.5
A. Suggest allocation bases to be used in allocating the service department costs to the two subsidiaries.
| |Service Departments |Allocations |
|1 |Human Resources ( hires employees and manages benefits) |# of employees |
|2 |Duplicating (performs copy services) |# of copies made |
|3 |Janitorial (provides routine cleaning services) |floor space |
|4 |Accounting (provides accounting services) |direct …show more content…
Custom Metal Works accountants determine that the following costs apply to the tables: Direct material: $100 Direct labor: 45 Manufacturing overhead: 70 Total: $ 215 (Note: Of the $ 70 of overhead, $14 is variable and $56 relates to fixed costs. The $56 of fixed overhead is allocated as $ 1.25 per direct labor dollar)
A. What will be the real effect on profit if the order is accepted?
| |Manufacture |Out-source |Difference |
|Units |3,000 |3,000 |