Question 3 of 4 < > Current Attempt in Progress -/35 III E ... Kingbird Juice Company produces and distributes concentrated orange juice. It has been operating in two key customer segments for years, selling to institutional customers and retail customers. The production departments are supported by the following three services: Administrative, Information Systems, and Maintenance. To date, the accounting team has simply allocated the support costs evenly between the two operating segments in order to determine total costs. Realizing that there are more accurate ways of assigning these costs, the new controller has asked you to prepare support department cost allocations using three other (and arguably more accurate) methods. Financial information is as follows. Support Departments Operating Segments Administrative Information Systems Maintenance Institutional Retail Original costs $74,000 $109,200 $58,000 $655,000 $348,000 Proportion of Administrative hours used 0.10 0.10 0.45 0.35 Proportion of Information Systems hours used 0.20 0.10 0.40 0.30 Proportion of Maintenance hours used 0.10 0.10 0.30 0.50 (a) Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct method. (Round intermediate calculations to 4 decimal places, e.g. 15.2516 and final answers to 2 decimal places, e.g. 15.25.) Operating Segments Institutional Retail Total costs $ +A $
Question 3 of 4 < > Current Attempt in Progress -/35 III E ... Kingbird Juice Company produces and distributes concentrated orange juice. It has been operating in two key customer segments for years, selling to institutional customers and retail customers. The production departments are supported by the following three services: Administrative, Information Systems, and Maintenance. To date, the accounting team has simply allocated the support costs evenly between the two operating segments in order to determine total costs. Realizing that there are more accurate ways of assigning these costs, the new controller has asked you to prepare support department cost allocations using three other (and arguably more accurate) methods. Financial information is as follows. Support Departments Operating Segments Administrative Information Systems Maintenance Institutional Retail Original costs $74,000 $109,200 $58,000 $655,000 $348,000 Proportion of Administrative hours used 0.10 0.10 0.45 0.35 Proportion of Information Systems hours used 0.20 0.10 0.40 0.30 Proportion of Maintenance hours used 0.10 0.10 0.30 0.50 (a) Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct method. (Round intermediate calculations to 4 decimal places, e.g. 15.2516 and final answers to 2 decimal places, e.g. 15.25.) Operating Segments Institutional Retail Total costs $ +A $
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...
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Transcribed Image Text:Question 3 of 4
< >
Current Attempt in Progress
-/35
III
E
...
Kingbird Juice Company produces and distributes concentrated orange juice. It has been operating in two key customer segments for
years, selling to institutional customers and retail customers. The production departments are supported by the following three
services: Administrative, Information Systems, and Maintenance. To date, the accounting team has simply allocated the support costs
evenly between the two operating segments in order to determine total costs. Realizing that there are more accurate ways of
assigning these costs, the new controller has asked you to prepare support department cost allocations using three other (and
arguably more accurate) methods. Financial information is as follows.
Support Departments
Operating Segments
Administrative
Information
Systems
Maintenance
Institutional
Retail
Original costs
$74,000
$109,200
$58,000
$655,000 $348,000
Proportion of Administrative hours
used
0.10
0.10
0.45
0.35
Proportion of Information Systems
hours used
0.20
0.10
0.40
0.30
Proportion of Maintenance hours
used
0.10
0.10
0.30
0.50
(a)
Determine the total costs that each operating segment would be accountable for if support costs are allocated using the direct
method. (Round intermediate calculations to 4 decimal places, e.g. 15.2516 and final answers to 2 decimal places, e.g. 15.25.)
Operating Segments
Institutional
Retail
Total costs
$
+A
$
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