Required: What is the financial advantage (disadvantage) of outsourcing the Payroll Department?
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- 3. At the end of the year, the Comptroller accumulated the total actual costs and hours incurred by Department A and Department B during the year for the company. Using the information provided below, caleulate the final overhead rates for both departments. Department A Department B Plant Total Direct Material Cost S337,000 $25,000 $362,000 $360,400 $99,000 $459,400 Direct Labor Cost $299,000 $495,000 S794,000 Department Overhead Cost Direct Labor Hours 34,000 9,000 43,000 Machine Hours 1,000 41,000 42,000 Department A: per direct labor hour Department B: per machine hourBrownley Company has one service department and two operating (production) departments. Payroll Department costs are allocated To the two operating departments in proportion to the number of employees in each. Listed below are the operating data for the current period: Direct Expenses $ 28,000 81,000 110,800 The total cost of operating the Milling Department for the current period is: Department Payroll Milling Assembly No. of Employees 45 105Use the information in the following table to compute each department's contribution to overhead (both in dollars and as a percent). (Round Contribution percent to 1 decimal place.) Dept. A Dept. B Dept. C Sales Cost of goods sold Gross profit $ 55.000 $ 219,000 $ 85,000 113,880 105,120 45,050 39,950 34,650 20,350 4,380 Total direct expenses 38,320 9,366 Contribution to overhead Contribution percent (of sales) Which department contributes the largest dollar amount to total overhead?
- At the end of the year, the Comptroller accumulated the total actual costs and hours incurred by Department A and Department B during the year for the company. Using the information provided below, calculate the final overhead rates for both departments. Plant Total Department B Department A $25,000 $362,000 $337,000 Direct Material Cost $99,000 $459,400 $360,400 Direct Labor Cost $495,000 $794,000 $299,000 Department Overhead Cost 43,000 9,000 34,000 Direct Labor Hours 42,000 41,000 1,000 Machine Hours per direct labor hour Department A: Department B per machine hourExpress Delivery Company (EDC) is considering outsourcing its Payroll Department to a payroll processing company for an annual fee of $223,800. An internally prepared report summarizes the Payroll Department's annual operating costs as follows: Supplies Payroll clerks' salaries Payroll supervisor's salary Payroll employee training expenses Depreciation of equipment Allocated share of common building operating costs Allocated share of common administrative overhead Total annual operating cost $ 33,800 123,800 61,800 13,800 23,800 18,800 31,800 $ 307,600 EDC currently rents overflow office space for $39,800 per year. If the company closes its Payroll Department, the employees occupying the rented office space could be brought in-house and the lease agreement on the rented space could be terminated with no penalty. If the Payroll Department is outsourced the payroll clerks will not be retained; however, the supervisor would be transferred to the company's Human Resource Management…Express Delivery Company (EDC) is considering outsourcing its Payroll Department to a payroll processing company for an annual fee of $222,400. An internally prepared report summarizes the Payroll Department's annual operating costs as follows: Supplies Payroll clerks' salaries Payroll supervisor's salary Payroll employee training expenses Depreciation of equipment Allocated share of common building operating costs Allocated share of common administrative overhead Total annual operating cost $ 32,400 122,400 60,400 12,400 22,400 17,400 30,400 $ 297,800 EDC currently rents overflow office space for $38,400 per year. If the company closes its Payroll Department, the employees occupying the rented office space could be brought in-house and the lease agreement on the rented space could be terminated with no penalty. If the Payroll Department is outsourced the payroll clerks will not be retained; however, the supervisor would be transferred to the company's Human Resource Management…
- Buckhorn Company's accounting records noted the following amounts for company payroll costs. What amount of payroll would be categorized as a period cost? Payroll Costs: Marketing director salary Factory manager salary Commissions paid to sales staff Administrative personnel wages Wages of production workers Multiple Choice C $302,000 $327,000 $615,000 $376,000 $164,000 $99,000 $74,000 $64,000 $214,000Express Delivery Company (EDC) is considering outsourcing its Payroll Department to a payroll processing company for an annual fee of $224,000. An internally prepared report summarizes the Payroll Department's annual operating costs as follows: Supplies Payroll clerks' salaries Payroll supervisor's salary Payroll employee training expenses Depreciation of equipment Allocated share of common building operating costs Allocated share of common administrative overhead Total annual operating cost $ 34,000 124,000 62,000 14,000 24,000 19,000 32,000 $ 309,000 EDC currently rents overflow office space for $40,000 per year. If the company closes its Payroll Department, the employees occupying the rented office space could be brought in-house and the lease agreement on the rented space could be terminated with no penalty. If the Payroll Department is outsourced the payroll clerks will not be retained; however, the supervisor would be transferred to the company's Human Resource Management…Use the following information to compute each department’s contribution to overhead. Which department contributes the largest amount toward total overhead? Department A Department B Department C Sales $ 61,000 $ 199,000 $ 79,000 Cost of goods sold 38,430 103,480 41,870 Gross profit 22,570 95,520 37,130 Total direct expenses 4,980 42,940 8,266
- A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?