1. Voltaire Corporation uses the direct method to allocate service department costs to operating
departments. The company has two service departments, Administrative and Facilities, and two
operating departments, Assembly and Finishing.
Operating
Service Department
Department
Administrative Facilities Assembly Finishing
Departmental costs
$ 32,200 $ 39,071 $ 125,940 $ 417,730
Employee time (hours)
3,900
1,130
29,000
29,000
Space occupied - square feet
8,900
1,130
41,000
2,900 Administrative Department costs are allocated on the basis of employee hours and Facilities Department
costs are allocated on the basis of space occupied.
Required:
Allocate the service department costs to the operating departments using the direct method. (Leave no
cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by
a minus sign. Do not round intermediate calculations. Omit the "$" sign in your response.) Departmental costs Service Department
Administrative
Facilities
$
$ Operating Department
Assembly
Finishing
$
$ Allocations:
Administrative costs
Facilities costs Total costs after allocations $ $ $ 2.
Kindschuh Corporation is working on its direct labor budget for the next two months. Each unit of output
requires 0.09 direct labor-hours. The direct labor rate is $7.60 per direct labor-hour. The production
budget calls for producing 5,000 units in June and 5,500 units in July.
Required:
Construct the direct labor budget for the next two months, assuming that the direct labor work force is
fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal
places. Omit the "$" sign in your response.)
June July $ Required production in units
Direct labor-hours per unit Total direct labor-hours needed
Direct labor cost per hour Total direct labor cost $ $ $ $ 3.
Freet Inc. is preparing its cash budget for November. The budgeted beginning cash balance is $25,000.
Budgeted cash receipts total $104,000 and budgeted cash disbursements total $95,000. The desired
ending cash balance is $75,000. The company can borrow up to $90,000 at any time from a local bank,
with interest not due until the following month.
Required:
Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if
any, would be needed to attain the desired ending cash balance. (Input all amounts as positive values.
Omit the "$" sign in your response.) Cash balance, beginning $ Add cash receipts Total cash available
Less cash disbursement Excess (deficiency) of cash available over disbursements
Borrowings Cash balance, ending $ 4. Pressler Corporation's activity-based costing system has three activity cost pools-Machining, Setting
Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect
labor, are allocated to the cost pools in proportion to the activity cost pools' consumption of resources. Equipment depreciation (total) $ 29,700
Indirect labor (total)
$ 7,390 Distribution of Resources Consumption Across Activity Cost Pools
Machining Setting up
Other
Equipment depreciation
0.20
0.50
0.30
Indirect labor
0.40
0.50
0.10 Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in
the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other
cost pool are not assigned to products.
MHs
Product
S4
Product
V6
Total Batches 15,800 1,400 10,200 1,700 26,000 3,100 Additional data concerning the company's products appears below:
Sales (total)
Direct materials (total)
Direct labor (total) Product S4
$ 83,700
$ 28,400
$ 34,000 Product V6
$ 73,900
$ 23,700
$ 27,800 Required:
a. Assign overhead costs to activity cost pools using activity-based costing. (Omit the "$" sign in your
response.) Equipment depreciation
Indirect labor Machining
$ Activity Cost Pools
Setting up
$ Other
$ Total
$ $ Total $ $ $ b. Calculate activity rates for each activity cost pool using activity-based costing. (Round your
answers to 2 decimal places. Omit the "$" sign in your response.)
Activity Rate
Machining
Setting up $ per MH $ per batch c. Determine the amount of overhead cost that would be assigned to each product using activity-based
costing. (Omit the "$" sign in your response.) Machining Product S4
$ Product V6
$ Setting up Total $ $ d. Determine the product margins for each product using activity-based costing. (Omit the "$" sign in
your response.) Product S4
Product V6 Product Margin
$
$ 5.
Capp Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow:
• Sales are budgeted at $280,000 for November, $290,000 for December, and $270,000 for January.
• Collections are expected to be 60% in the month of sale, 38% in the month following the sale, and 2%
uncollectible.
• The cost of goods sold is 80% of sales. • The company desires an ending merchandise inventory equal to 40% of the following month's cost of
goods sold. Payment for merchandise is made in the month following the purchase.
• The November beginning balance in the accounts receivable account is $63,000.
• The November beginning balance in the accounts payable account is $250,000.
Required:
a. Prepare a Schedule of Expected Cash Collections for November and December. (Omit the "$" sign
in your response.) Sales Capp Corporation
Schedule of Expected Cash Collections
November
$ December
$ Schedule of Expected Cash Collections
$ Accounts receivable $ November sales
December sales
$ Total cash collections $ b. Prepare a Merchandise Purchases Budget for November and December. (Input all amounts as
positive values. Omit the "$" sign in your response.)
Capp Corporation
Merchandise Purchases Budget
Budgeted cost of goods sold November
$ December
$ :
(Click to select) (Click to select) Total needs
:
(Click to select) Required purchase (Click to select) $ $ 6. Spendlove Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool
Assembly
Processing orders
Inspection Total Cost
$1,341,408
$67,522.00
$123,120 Total Activity
62,800 machine-hours
2,450 orders
1,620 inspection-hours The company makes 440 units of product S78N a year, requiring a total of 1,830 machine-hours, 106
orders, and 37 inspection-hours per year. The product's direct materials cost is $52.67 per unit and its
direct labor cost is $12.32 per unit. The product sells for $181.00 per unit.
According to the activity-based costing system, the product margin for product S78N is: (Round your
intermediate calculations to 2 decimal places.) $6,222.24
$51,044.40
$9,143.60
$9,034.24

 

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