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Category > Economics Posted 05 Jun 2017 My Price 10.00

TS Elective: UNICAP Exercise 1: Allocating mixed service costs

Participant materials 1: BTS Elective: UNICAP Exercise 1: Allocating mixed service costs
Instructions
Spend a few minutes reading through the exercise. Work together as a team to complete
the requirements. Elect a spokesperson for your table. Facts
Big Pane Inc., a manufacturer of custom designed glass windows, has: Total §263A labor costs $6 million (excluding mixed service costs) Total labor costs $15 million, including $3 million of mixed service
labor costs Total §263A production costs $10 million (excluding mixed service costs) Total costs $30 million (excluding mixed service costs) Total mixed service costs $5 million Required
1. What amount of mixed service costs would Big Pane treat as being capitalizable using
the simplified service cost method with a production cost allocation ratio?
2. What amount of mixed service costs would Big Pane treat as being capitalizable using
the simplified service cost method with a labor-based allocation ratio?
3. Based on your answers above, which allocation ratio should Big Pane prefer for
allocating its mixed service costs? BTS Elective 1 © 2013 EYGM Limited

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SuperTutor
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Status NEW Posted 05 Jun 2017 07:06 AM My Price 10.00

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