Description
Complete Exercise 8-27 and Problem 17-26 in the textbook.
Exercise 8-27 should be prepared in a Word document with a response of a minimum of 250 words.
Problem 17-26 should be completed using Excel with supporting cacluclations shown. Please note, you must show your work in Excel, which includes providing the formulas in the cells, not just the summary value. You may not earn full points if you do not show your work in detail.
Save your assignment as Lastname_FirstnameACC650_T7.docx.
APA style is not required, but solid academic writing is expected.
1.
Direct method:
Provider of Service
Cost to Be
Allocated
Production Department
Etching
Proportion
Maintenance……………..
Computing……………….
Total service department costs allocated
Overhead costs traceable to
production departments
Total overhead cost
Direct-labor hours (DLH)
(20 2,000)
(80 2,000)
Overhead rate per hour
(total overhead ÷ DLH)
Check on allocation procedure:
Service department costs allocated to Etching
Service department costs allocated to Finishing
Total costs to be allocated ($48,000 + $250,000)
*Rounded
2
Step-down method:
Computing
Costs prior to allocation…….
Allocation of Computing
Department costs……………
Allocation of Maintenance
Department costs……………
Total service department cost allocated
Overhead costs traceable to
production departments
Service Departments
Maintenance
Total overhead cost
Direct-labor hours (DLH)
(20 2,000)
(80 2,000)
Overhead rate per hour
(total overhead ÷ DLH)
Check on allocation procedure:
Service department costs allocated to Etching
Service department costs allocated to Finishing
Total costs to be allocated ($48,000 + $250,000)
Department
ents
Maintenance
Amount
Finishing
Proportion
Etching
Amount
Production Departments
Finishing
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792 of 848
a
C
III
Required: Use dual cost allocation in conjunction with each of the following methods to allocate
Tampa Instrument Company’s service department costs: (1) direct method and (2) step-down method.
Problem 17-26
Service Department Cost
Allocation
(LO 17-1)
Dexcom CLARITY
Uploade… S v1.5.15
23
1. Overhead rate per hour,
etching: $10.602 (rounded)
2. Maintenance department
costs allocated to finishing:
$87,111
Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours
for its two production departments, Etching and Finishing. The Etching Department employs
20 people and the Finishing Department employs 80 people. Each person in these two departments
works 2,000 hours per year. The production-related overhead costs for the Etching Department are
budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service
departments, Maintenance and Computing, directly support the two production departments. These
service departments have budgeted costs of $48,000 and $250,000, respectively. The production
departments’ overhead rates cannot be determined until the service departments’ costs are allo-
cated. The following schedule reflects the use of the Maintenance Department’s and Computing
Department’s output by the various departments.
8/17
PT
Ex
Х
S
Maintenance
Using Department
Computing Etching
1,000 1,000
0 840,000
2017 Tuition
Reimbur…une.JPG
Service Department
Maintenance (maintenance hours)
Computing (minutes)
0
240,000
Finishing
8,000
120,000
2017 Tuition2
VandeLune.JPG
Required:
1. Use the direct method to allocate service department costs. Calculate the overhead rates per direct-
labor hour for the Etching Department and the Finishing Department.
2. Use the step-down method to allocate service department costs. Allocate the Computing Depart-
ment’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department
and the Finishing Department.
DOCX
ents
Brad VandeLune
cover letter
(CMA, adapted)
P17-26 Template.xlsx
…
Adobe Flash Player.dmg
…
..
Adobe Flash Player.dmg
Show All
Х
Chrome
File
Edit
View
History Bookmarks
People
Window
Help
608.59 MB
4A
100% G2
Sun 4:10 PM
Brad VandeLune Q
E
Scopes & Hunting X
Student Portal | M X
Performance Mana x
Grand Canyon Unix
managerial_accour X
S Ask a new questior X
Brad
E → C
Secure https://viewer.gcu.edu/mqBcBY
OT
F :
—
Apps AdvoCare
Apple iCloud
Facebook
Twitter
Yahoo!
News
Popular
| Imported From Safari
D GCU Login
Other Bookmarks
Macintosh
HD
+
120 %
792 of 848
a
C
III
Required: Use dual cost allocation in conjunction with each of the following methods to allocate
Tampa Instrument Company’s service department costs: (1) direct method and (2) step-down method.
Problem 17-26
Service Department Cost
Allocation
(LO 17-1)
Dexcom CLARITY
Uploade… S v1.5.15
23
1. Overhead rate per hour,
etching: $10.602 (rounded)
2. Maintenance department
costs allocated to finishing:
$87,111
Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours
for its two production departments, Etching and Finishing. The Etching Department employs
20 people and the Finishing Department employs 80 people. Each person in these two departments
works 2,000 hours per year. The production-related overhead costs for the Etching Department are
budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service
departments, Maintenance and Computing, directly support the two production departments. These
service departments have budgeted costs of $48,000 and $250,000, respectively. The production
departments’ overhead rates cannot be determined until the service departments’ costs are allo-
cated. The following schedule reflects the use of the Maintenance Department’s and Computing
Department’s output by the various departments.
8/17
PT
Ex
Х
S
Maintenance
Using Department
Computing Etching
1,000 1,000
0 840,000
2017 Tuition
Reimbur…une.JPG
Service Department
Maintenance (maintenance hours)
Computing (minutes)
0
240,000
Finishing
8,000
120,000
2017 Tuition2
VandeLune.JPG
Required:
1. Use the direct method to allocate service department costs. Calculate the overhead rates per direct-
labor hour for the Etching Department and the Finishing Department.
2. Use the step-down method to allocate service department costs. Allocate the Computing Depart-
ment’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department
and the Finishing Department.
DOCX
ents
Brad VandeLune
cover letter
(CMA, adapted)
P17-26 Template.xlsx
…
Adobe Flash Player.dmg
…
..
Adobe Flash Player.dmg
Show All
Х
Purchase answer to see full
attachment
Direct method:
Provider of Service
Cost to Be
Allocated
Production Department
Etching
Proportion
Maintenance……………..
Computing……………….
Total service department costs allocated
Overhead costs traceable to
production departments
Total overhead cost
Direct-labor hours (DLH)
(20 2,000)
(80 2,000)
Overhead rate per hour
(total overhead ÷ DLH)
Check on allocation procedure:
Service department costs allocated to Etching
Service department costs allocated to Finishing
Total costs to be allocated ($48,000 + $250,000)
*Rounded
2
Step-down method:
Computing
Costs prior to allocation…….
Allocation of Computing
Department costs……………
Allocation of Maintenance
Department costs……………
Total service department cost allocated
Overhead costs traceable to
production departments
Service Departments
Maintenance
Total overhead cost
Direct-labor hours (DLH)
(20 2,000)
(80 2,000)
Overhead rate per hour
(total overhead ÷ DLH)
Check on allocation procedure:
Service department costs allocated to Etching
Service department costs allocated to Finishing
Total costs to be allocated ($48,000 + $250,000)
Department
ents
Maintenance
Amount
Finishing
Proportion
Etching
Amount
Production Departments
Finishing
Chrome
File
Edit
View
History Bookmarks
People
Window
Help
608.59 MB
4A
100% G2
Sun 4:10 PM
Brad VandeLune Q
E
Scopes & Hunting X
Student Portal | M X
Performance Mana x
Grand Canyon Unix
managerial_accour X
S Ask a new questior X
Brad
E → C
Secure https://viewer.gcu.edu/mqBcBY
OT
F :
—
Apps AdvoCare
Apple iCloud
Yahoo!
News
Popular
| Imported From Safari
D GCU Login
Other Bookmarks
Macintosh
HD
+
120 %
792 of 848
a
C
III
Required: Use dual cost allocation in conjunction with each of the following methods to allocate
Tampa Instrument Company’s service department costs: (1) direct method and (2) step-down method.
Problem 17-26
Service Department Cost
Allocation
(LO 17-1)
Dexcom CLARITY
Uploade… S v1.5.15
23
1. Overhead rate per hour,
etching: $10.602 (rounded)
2. Maintenance department
costs allocated to finishing:
$87,111
Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours
for its two production departments, Etching and Finishing. The Etching Department employs
20 people and the Finishing Department employs 80 people. Each person in these two departments
works 2,000 hours per year. The production-related overhead costs for the Etching Department are
budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service
departments, Maintenance and Computing, directly support the two production departments. These
service departments have budgeted costs of $48,000 and $250,000, respectively. The production
departments’ overhead rates cannot be determined until the service departments’ costs are allo-
cated. The following schedule reflects the use of the Maintenance Department’s and Computing
Department’s output by the various departments.
8/17
PT
Ex
Х
S
Maintenance
Using Department
Computing Etching
1,000 1,000
0 840,000
2017 Tuition
Reimbur…une.JPG
Service Department
Maintenance (maintenance hours)
Computing (minutes)
0
240,000
Finishing
8,000
120,000
2017 Tuition2
VandeLune.JPG
Required:
1. Use the direct method to allocate service department costs. Calculate the overhead rates per direct-
labor hour for the Etching Department and the Finishing Department.
2. Use the step-down method to allocate service department costs. Allocate the Computing Depart-
ment’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department
and the Finishing Department.
DOCX
ents
Brad VandeLune
cover letter
(CMA, adapted)
P17-26 Template.xlsx
…
Adobe Flash Player.dmg
…
..
Adobe Flash Player.dmg
Show All
Х
Chrome
File
Edit
View
History Bookmarks
People
Window
Help
608.59 MB
4A
100% G2
Sun 4:10 PM
Brad VandeLune Q
E
Scopes & Hunting X
Student Portal | M X
Performance Mana x
Grand Canyon Unix
managerial_accour X
S Ask a new questior X
Brad
E → C
Secure https://viewer.gcu.edu/mqBcBY
OT
F :
—
Apps AdvoCare
Apple iCloud
Yahoo!
News
Popular
| Imported From Safari
D GCU Login
Other Bookmarks
Macintosh
HD
+
120 %
792 of 848
a
C
III
Required: Use dual cost allocation in conjunction with each of the following methods to allocate
Tampa Instrument Company’s service department costs: (1) direct method and (2) step-down method.
Problem 17-26
Service Department Cost
Allocation
(LO 17-1)
Dexcom CLARITY
Uploade… S v1.5.15
23
1. Overhead rate per hour,
etching: $10.602 (rounded)
2. Maintenance department
costs allocated to finishing:
$87,111
Celestial Artistry Company is developing departmental overhead rates based on direct-labor hours
for its two production departments, Etching and Finishing. The Etching Department employs
20 people and the Finishing Department employs 80 people. Each person in these two departments
works 2,000 hours per year. The production-related overhead costs for the Etching Department are
budgeted at $200,000, and the Finishing Department costs are budgeted at $320,000. Two service
departments, Maintenance and Computing, directly support the two production departments. These
service departments have budgeted costs of $48,000 and $250,000, respectively. The production
departments’ overhead rates cannot be determined until the service departments’ costs are allo-
cated. The following schedule reflects the use of the Maintenance Department’s and Computing
Department’s output by the various departments.
8/17
PT
Ex
Х
S
Maintenance
Using Department
Computing Etching
1,000 1,000
0 840,000
2017 Tuition
Reimbur…une.JPG
Service Department
Maintenance (maintenance hours)
Computing (minutes)
0
240,000
Finishing
8,000
120,000
2017 Tuition2
VandeLune.JPG
Required:
1. Use the direct method to allocate service department costs. Calculate the overhead rates per direct-
labor hour for the Etching Department and the Finishing Department.
2. Use the step-down method to allocate service department costs. Allocate the Computing Depart-
ment’s costs first. Calculate the overhead rates per direct-labor hour for the Etching Department
and the Finishing Department.
DOCX
ents
Brad VandeLune
cover letter
(CMA, adapted)
P17-26 Template.xlsx
…
Adobe Flash Player.dmg
…
..
Adobe Flash Player.dmg
Show All
Х
Purchase answer to see full
attachment
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