All Related Questions of Indirect Cost

Q: Indicate which of the following activities performed by an auditor for a

Indicate which of the following activities performed by an auditor for a governmental client are (a) allowable, (b) permitted if safeguards are in place, or (c) prohibited. 1. Serving as an adviser on...

Q: Ed Hickey, the consultant introduced at the beginning of section two

Ed Hickey, the consultant introduced at the beginning of section two of the chapter has obtained the following data relative to the Kaufman and D’Esti consulting job: Assume that th...

Q: Boyer and Kubek, architects, have been using a simplified costing

Boyer and Kubek, architects, have been using a simplified costing system in which all professional labor costs are included in a single direct cost category, professional labor; and all overhead costs...

Q: Distinguish between a direct cost and an indirect cost when the cost

Distinguish between a direct cost and an indirect cost when the cost object is the job.

Q: Northwest Hospital is a full-service hospital that provides everything from

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicat...

Q: Listed below are costs found in various organizations. 1.

Listed below are costs found in various organizations. 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons’ commissions. 4. Sup...

Q: Various costs associated with the operation of factories are given below:

Various costs associated with the operation of factories are given below: 1. Electricity to run production equipment. 2. Rent on a factory building. 3. Cloth used to make drapes. 4. Production superin...

Q: Georgia Pacific, a manufacturer, incurs the following costs.

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory...

Q: Houston Milling is a subcontractor to Pratt & Whitney, which makes

Houston Milling is a subcontractor to Pratt & Whitney, which makes jet engines. Houston Milling makes two different fuel pump housings for two Pratt & Whitney jet engines: the A11 housing and...

Q: Joe Bell, president and chief executive officer of Dyna Golf,

Joe Bell, president and chief executive officer of Dyna Golf, has called a meeting of the executive committee of his board of directors. He is concerned about the price competition and declining sales...

Q: List a direct cost and an indirect cost for each of the

List a direct cost and an indirect cost for each of the three different cost objects in question 5. • Advertising • Internal control • Environmental sustainability

Q: Compare direct costs to indirect costs. Give an example of a

Compare direct costs to indirect costs. Give an example of a cost at a company that could be a direct cost at one level of the organization but would be considered an indirect cost at a different lev...

Q: Howard Rockness was worried. His company, Rockness Bottling, showed

Howard Rockness was worried. His company, Rockness Bottling, showed declining profits over the past several years despite an increase in revenues. With profits declining and revenues increasing, Rockn...

Q: “Activity-based costing does a better job of allocating both

“Activity-based costing does a better job of allocating both direct and indirect cost than traditional methods do.” Is this statement true, false, or uncertain? Explain.

Q: Use the information contained below to compress one time unit per move

Use the information contained below to compress one time unit per move using the least cost method. Assume the total indirect cost for the project is $700 and there is a savings of $50 per time unit r...

Q: Use the information contained below to compress one time unit per move

Use the information contained below to compress one time unit per move using the least cost method. Assume the total indirect cost for the project is $2,000 and there is a savings of $100 per time uni...

Q: Use the information contained below to compress one time unit per move

Use the information contained below to compress one time unit per move using the least cost method. Reduce the schedule until you reach the crash point of the network. For each move identify what acti...

Q: The Department of Natural Resources is responsible for maintaining the state’s

The Department of Natural Resources is responsible for maintaining the state’s parks and forest lands, stocking the lakes and rivers with fish, and generally overseeing the protection of the environm...

Q: Several costs incurred by Cape Cod Hotel and Restaurant are given in

Several costs incurred by Cape Cod Hotel and Restaurant are given in the following list. For each cost, indicate which of the following classifications best describe the cost. More than one classifica...

Q: Indicate whether each of the following costs is a direct cost or

Indicate whether each of the following costs is a direct cost or an indirect cost of the restaurant in a hotel. a. Cost of food served. b. Chef’s salary and fringe benefits. c. Part of the cost of mai...

Q: Hoyt Company uses a plantwide cost driver rate with machine hours as

Hoyt Company uses a plantwide cost driver rate with machine hours as the cost driver. At the beginning of last year, Hoyt Company estimated its capacity-related (overhead) costs as $15,000,000 for a p...

Q: In the context of computing a predetermined indirect cost rate, what

In the context of computing a predetermined indirect cost rate, what is a cost driver?

Q: Why do firms use multiple indirect cost pools?

Why do firms use multiple indirect cost pools?

Q: “Use of a single cost driver rate when an indirect cost

“Use of a single cost driver rate when an indirect cost pool includes costs that have different cost drivers (causes of costs) leads to distortions in job costs.” Do you agree with this statement? Exp...

Q: Define direct cost and indirect cost and provide an example of each

Define direct cost and indirect cost and provide an example of each.

Q: What are indirect cost pools?

What are indirect cost pools?

Q: What are predetermined indirect cost rates commonly called in practice?

What are predetermined indirect cost rates commonly called in practice?

Q: How are indirect cost rates determined?

How are indirect cost rates determined?

Q: Bevans Co. makes two products, Product X and Product Y

Bevans Co. makes two products, Product X and Product Y. Bevans has produced Product X for many years without generating any hazardous wastes. Recently, Bevans developed Product Y, which is superior to...

Q: The Monteiro Manufacturing Corporation manufactures and sells folding umbrellas. The corporation’s

The Monteiro Manufacturing Corporation manufactures and sells folding umbrellas. The corporation’s condensed income statement for the year ended December 31, 2011, follows: Monteiro...

Q: For each of the following costs, indicate whether the amount is

For each of the following costs, indicate whether the amount is a direct or indirect cost of the equipment maintenance department. Also indicate whether each cost is at least partially controllable by...

Q: Hummer Company uses manufacturing cells to produce its products (a cell

Hummer Company uses manufacturing cells to produce its products (a cell is a manufacturing unit dedicated to the production of subassemblies or products). One manufacturing cell produces small motors...

Q: Smith and Baker Legal Services employs five full-time attorneys and

Smith and Baker Legal Services employs five full-time attorneys and nine paraprofessionals. Budgeted salaries are $100,000 for each attorney and $50,000 for each paraprofessional. Budgeted indirect co...

Q: LaPlatt & Associates is an accounting firm that provides audit, tax

LaPlatt & Associates is an accounting firm that provides audit, tax, and accounting services to medium-size retail companies. It employs 50 professionals (10 partners and 40 associates) who work direc...

Q: David Letterman works in the production department of Northeast Plastics (NEP

David Letterman works in the production department of Northeast Plastics (NEP) as a machine operator. David, a long-time employee of NEP, is paid on an hourly basis at a rate of $24 per hour. David wo...

Q: Northwest Hospital is a full-service hospital that provides everything from

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indi...

Q: Listed below are costs found in various organizations. 1.

Listed below are costs found in various organizations. 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons’ commissions. 4....

Q: Various costs associated with the operation of factories are given below:

Various costs associated with the operation of factories are given below: 1. Electricity to run production equipment. 2. Rent on a factory building. 3. Cloth used to make drapes. 4. Production sup...

Q: Crosstown Health Center runs two programs: drug addict rehabilitation and aftercare

Crosstown Health Center runs two programs: drug addict rehabilitation and aftercare (counseling and support of patients after release from a mental hospital). The center’s budget for...

Q: Zarson’s Netballs is a manufacturer of high-quality basketballs and volleyballs

Zarson’s Netballs is a manufacturer of high-quality basketballs and volleyballs. Setup costs are driven by the number of setups. Equipment and maintenance costs increase with the num...

Q: Creative Solutions designs Web pages for clients in the education sector.

Creative Solutions designs Web pages for clients in the education sector. The company’s job-costing system has a single direct cost category (Web-designing labor) and a single indirect cost pool compo...

Q: The job-costing system at Melody’s Custom Framing has five indirect

The job-costing system at Melody’s Custom Framing has five indirect cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is...

Q: The Jerico store of Jiffy Mart, a chain of small neighborhood

The Jerico store of Jiffy Mart, a chain of small neighborhood convenience stores, is preparing its activity-based budget for January 2018. Jiffy Mart has three product categories: soft drinks (35% of...

Q: Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting

Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2018. Each successive month, the budgeted cost-driver rate decreases by 0.4% relative to...

Q: Wharton has two classifications of professional staff: partners and associates.

Wharton has two classifications of professional staff: partners and associates. Peyton asks his assistant to examine the relative use of partners and associates on the recent Steger Enterprises and Bl...

Q: Kubin Company’s relevant range of production is 18,000 to 22

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materi...

Q: Madison Seniors Care Center is a nonprofit organization that provides a variety

Madison Seniors Care Center is a nonprofit organization that provides a variety of health services to the elderly. The center is organized into a number of departments, one of which is the Meals-On-...

Q: Reidland Manufacturing has four divisions: Acme, Dune, Stark,

Reidland Manufacturing has four divisions: Acme, Dune, Stark, and Brothers. Corporate headquarters is in Minnesota. Reidland corporate headquarters incurs costs of $16,800,000 per period, which is an...

Q: The Huffman School of Vocational Technology has organized the school training programs

The Huffman School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dent...

Q: Why are the terms direct cost and indirect cost independent of the

Why are the terms direct cost and indirect cost independent of the terms fixed cost and variable cost? Give an example to illustrate.

Q: HealthSouth Corporation claims to be “the nation’s largest owner and operator

HealthSouth Corporation claims to be “the nation’s largest owner and operator of inpatient rehabilitation hospitals in terms of revenues, number of hospitals, and patients treated and discharged.” As...

Q: Vulcan College School of Business is divided into three departments: accounting

Vulcan College School of Business is divided into three departments: accounting, marketing, and management. Relevant information for each of the departments follows: Vulcan is a private school that...

Q: Ludmilla Construction Company is composed of two divisions: (1)

Ludmilla Construction Company is composed of two divisions: (1) Home Construction and (2) Commercial Construction. The Home Construction Division is in the process of building 12 houses and the Commer...

Q: Greer Company requested that you (1) assign indirect expenses to

Greer Company requested that you (1) assign indirect expenses to its jewelry and shoes departments as appropriate and (2) prepare an income statement for August 201X showing departmental contribution...

Q: Explain how advertising expense could be both a direct cost and an

Explain how advertising expense could be both a direct cost and an indirect cost for a company.

Q: Glover Company has requested that you (1) assign indirect expenses

Glover Company has requested that you (1) assign indirect expenses to its jewelry and shoes departments as appropriate and (2) prepare an income statement for June 201X showing departmental contributi...

Q: Listed below are costs of providing an airline service. Classify each

Listed below are costs of providing an airline service. Classify each cost as (a) either variable or fixed, and (b) either direct or indirect. Consider the cost object to be a flight.

Q: Georgia Pacific, a manufacturer, incurs the following costs.

Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory o...

Q: Chirac & Partners is a Quebec based public accounting partnership specializing in

Chirac & Partners is a Quebec based public accounting partnership specializing in audit services. Its job-costing system has a single direct cost category (professional labour) and a single indirect c...

Q: Michael and Gabitel (MG) is a law firm that specializes

Michael and Gabitel (MG) is a law firm that specializes in writing wills. Its job-costing system has one direct cost pool, professional labour, and a single indirect cost pool that includes all suppor...

Q: Anderson Construction assembles residential homes. It uses a job-costing

Anderson Construction assembles residential homes. It uses a job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool (assembly support). The...

Q: The University of Toronto Press is wholly owned by the university.

The University of Toronto Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the Press were an outside business enterprise....

Q: Keating & Partners is a law firm specializing in labour relations and

Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work directly with its clients. The average bu...

Q: Keating has just completed a review of its job-costing system

Keating has just completed a review of its job-costing system. This review included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about...

Q: Gaston Ltd. uses a normal job- costing system with two

Gaston Ltd. uses a normal job- costing system with two direct cost categories—direct materials and direct manufacturing labour—and one indirect cost category—manufacturing overhead. At the beginning o...

Q: Nicole Limited is a company that produces machinery to customer order.

Nicole Limited is a company that produces machinery to customer order. Its job-costing system (using normal costing) has two direct cost categories (direct materials and direct manufacturing labour) a...

Q: J. Watson Kalor Ltd. uses a normal job-costing

J. Watson Kalor Ltd. uses a normal job-costing system with two direct cost categories, direct materials and direct labour, and one indirect cost pool. Manufacturing overhead is allocated based on dire...

Q: Hanley asks his assistant to collect details on those costs included in

Hanley asks his assistant to collect details on those costs included in the $21,000 indirect-cost pool that can be traced to each individual case. After further analysis, Wigan is able to reclassify $...

Q: Wigan Associates has two classifications of professional staff—partners and managers

Wigan Associates has two classifications of professional staff—partners and managers. Hanley asks his assistant to examine the relative use of partners and managers on the recent Wid...

Q: Department indirect cost rates are never activity cost rates.” Do you

Department indirect cost rates are never activity cost rates.” Do you agree? Explain.

Q: Increasing the number of indirect cost pools is guaranteed to sizably increase

Increasing the number of indirect cost pools is guaranteed to sizably increase the accuracy of product or service costs.” Do you agree? Why?

Q: A number of terms are listed below: source document

A number of terms are listed below: source document ………………………………………………..actual cost tracing ……………………………………..cost allocation rate proration ……………………………………………..opportunity cost cost pool Requi...

Q: Michael Scott books tours for new bands, and arranges to print

Michael Scott books tours for new bands, and arranges to print T-shirts and produce demo CDs to sell on the tour. Scott’s agency uses a normal costing system with two direct cost poo...

Q: Lytton Ltd. uses a normal job-costing system with two

Lytton Ltd. uses a normal job-costing system with two direct cost categories (direct materials and direct labour) and one indirect cost pool. It allocates manufacturing overhead to jobs using a predet...

Q: Mike Rotundo, the president of Tax Assist, is examining alternative

Mike Rotundo, the president of Tax Assist, is examining alternative ways to compute indirect cost rates. He collects the following information from the budget for 2016: Budgeted variable indirect cost...

Q: Duchess Ltd. manufactures and installs kitchen cabinetry. It uses normal

Duchess Ltd. manufactures and installs kitchen cabinetry. It uses normal job costing with two direct cost categories (direct materials and direct manufacturing labour) and one indirect cost pool for m...

Q: Heights Academy, a private school, serves 500 students: 200

Heights Academy, a private school, serves 500 students: 200 in the middle school (Grades 6 to 8) and 300 in the high school (Grades 9 to 12). Each school group has its own assistant principal, and the...

Q: PEI Potatoes processes potatoes into potato cuts at its highly automated plant

PEI Potatoes processes potatoes into potato cuts at its highly automated plant. For many years, it processed potatoes for only the retail consumer market where it had a superb reputation for quality....

Q: The Parksville location of Your Mart (YM), a chain of

The Parksville location of Your Mart (YM), a chain of small neighborhood grocery stores, is preparing its activity-based budget for January 2016. YM has three product categories: soft drinks, fresh pr...

Q: Your Mart (YM) has a Kaizen (continuous improvement)

Your Mart (YM) has a Kaizen (continuous improvement) approach to budgeting activity area costs for each month of 2016. Each successive month, the budgeted cost driver rate decreases by 0.2% relative t...

Q: A number of terms are listed below: /

A number of terms are listed below: Required: Select the terms from the above list to complete the following sentences. There are several methods of quantitative analysis that a management team ca...

Q: Greenbold Manufacturing has four divisions named after its locations: Ontario,

Greenbold Manufacturing has four divisions named after its locations: Ontario, Alberta, Yukon, and Saskatchewan. Corporate headquarters is in Manitoba. Greenbold corporate headquarters incurs $5,600,0...

Q: Larsen Corp. manufactures car seats in its Sarnia plant. Each

Larsen Corp. manufactures car seats in its Sarnia plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-c...

Q: Do Problem 17-31 using the FIFO method of process costing

Do Problem 17-31 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method....

Q: Porter Handcraft is a manufacturer of picture frames for large retailers.

Porter Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: assembly and finishing. This problem focuses on the assembly department. T...

Q: Do Problem 17-36 using the FIFO method of process costing

Do Problem 17-36 using the FIFO method of process costing. If you did Problem 17-36, explain any difference between the cost of work completed and transferred out and the cost of ending work in proces...

Q: Publish Inc. has two departments: printing and binding. Each

Publish Inc. has two departments: printing and binding. Each department has one direct cost category (direct materials) and one indirect cost category (conversion costs). This problem focuses on the b...

Q: Refer to the information in Problem 17-39. Suppose that

Refer to the information in Problem 17-39. Suppose that Publish Inc. uses the FIFO method instead of the weighted-average method in all of its departments. The only changes to Problem 17-39 under the...

Q: Two graduates of the university run M&S Java, and

Two graduates of the university run M&S Java, and they have just opened their take-out coffee and snack bar on the university campus. At the end of their first month of operations they want to und...

Q: Why might a manager prefer that budgeted rather than actual indirect cost

Why might a manager prefer that budgeted rather than actual indirect cost allocation rates be used for costs being allocated to her division from another division?

Q: Medical Instruments uses a manufacturing costing system with one direct cost category

Medical Instruments uses a manufacturing costing system with one direct cost category (direct materials) and three indirect cost categories: a. Setup, production order, and materials-handling costs th...

Q: The consulting firm CMA Financial employs 40 full-time staff.

The consulting firm CMA Financial employs 40 full-time staff. The estimated compensation per employee is $105,000 for 1,750 hours. It charges all direct labour costs to clients. It includes any other...

Q: Green bold Manufacturing has four divisions named after its locations: Arizona

Green bold Manufacturing has four divisions named after its locations: Arizona, Colorado, Delaware, and Florida. Corporate headquarters is in Minnesota. Green bold corporate headquarters incurs $5,600...

Q: Jim Anderson works in the production department of Midwest Steelworks as a

Jim Anderson works in the production department of Midwest Steelworks as a machine operator. Jim, a long-time employee of Midwest, is paid on an hourly basis at a rate of $20 per hour. Jim works five...

Q: Tamden, Inc., prints custom marketing materials. The business was

Tamden, Inc., prints custom marketing materials. The business was started January 1, 2010. The company uses a normal-costing system. It has two direct cost pools, materials and labor and one indirect...

Q: Wigan has two classifications of professional staff: partners and associates.

Wigan has two classifications of professional staff: partners and associates. Hanley asks his assistant to examine the relative use of partners and associates on the recent Widnes Coal and St. Helen&a...

Q: Uppervale Health Center runs two programs: drug addict rehabilitation and aftercare

Uppervale Health Center runs two programs: drug addict rehabilitation and aftercare (counseling and support of patients after release from a mental hospital). The center’s budget for...

Q: Nivag’s Netballs is a manufacturer of high quality basketballs and volleyballs.

Nivag’s Netballs is a manufacturer of high quality basketballs and volleyballs. Setup costs are driven by the number of batches. Equipment and maintenance costs increase with the num...

Q: Cam Cody schedules book signings for science fiction authors and creates e

Cam Cody schedules book signings for science fiction authors and creates e-books and books on CD to sell at each signing. Cody uses a normal-costing system with two direct cost pools, labor and materi...

Q: Open Doors, Inc., produces two types of doors, interior

Open Doors, Inc., produces two types of doors, interior and exterior. The company’s simple costing system has two direct cost categories (materials and labor) and one indirect cost p...

Q: The job costing system at Smith’s Custom Framing has five indirect cost

The job costing system at Smith’s Custom Framing has five indirect cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is...

Q: The Chelsea store of Family Supermarket (FS), a chain of

The Chelsea store of Family Supermarket (FS), a chain of small neighborhood grocery stores, is preparing its activity-based budget for January 2011. FS has three product categories: soft drinks, fresh...

Q: Family Supermarkets (FS) has a kaizen (continuous improvement)

Family Supermarkets (FS) has a kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2011. Each successive month, the budgeted cost-driver rate decreases by 0....

Q: In November 2012, a consultant was employed to review and document

In November 2012, a consultant was employed to review and document the planning and control systems of Integrated Technology Services (UK) Ltd (ITS-UK), to ensure that these were effectively meeting t...

Q: Hardhat Ltd’s Budget Committee, which has members drawn from all the

Hardhat Ltd’s Budget Committee, which has members drawn from all the major functions in the business, is meeting to consider the projected income statement for 2018/2019, which is co...

Q: During a recent management meeting at Sunset Consulting Services, a team

During a recent management meeting at Sunset Consulting Services, a team member questioned why the costing system had multiple indirect cost pools given it would be easier just to have one. Provide a...

Q: Venture Buses operates throughout the south-eastern suburbs of Melbourne,

Venture Buses operates throughout the south-eastern suburbs of Melbourne, with its depot located in Cheltenham. Every day, fuel is delivered and stored in tanks located in the depot. This fuel is used...

Q: A local hospital is required to account for the total cost of

A local hospital is required to account for the total cost of patient care, including support costs. Patients are assigned all direct costs. Support costs are $240 000 per month plus $90 per patient d...

Q: Vines Ltd produces custom machine parts on a job order basis.

Vines Ltd produces custom machine parts on a job order basis. The company has two direct product cost categories: direct materials and direct labour. In the past, indirect manufacturing costs were all...

Q: Benson Manufacturing estimates the following activity for the coming year.

Benson Manufacturing estimates the following activity for the coming year. • Expected production 23 000 units • Expected direct labour hours 1750 hours • Expected manufacturing overhead $92 000. Manuf...

Q: Mercy Hospital uses a costing system to determine the cost of patients

Mercy Hospital uses a costing system to determine the cost of patients who have surgery. The hospital uses a budgeted indirect cost rate for allocating indirect costs to patient stays. In March, the o...

Q: Winton Produce package and distribute three grades of animal feed. The

Winton Produce package and distribute three grades of animal feed. The material cost per tonne and estimated annual sales for each of the products are as follows. The indirect cost of operating the m...

Q: Regional Animal Services is located in rural Queensland and treats farm animals

Regional Animal Services is located in rural Queensland and treats farm animals and domestic pets. Providing veterinary care to farm animals requires travel to the individual farms in the area, while...

Q: The financial controller of Seats R Us has established indirect cost pools

The financial controller of Seats R Us has established indirect cost pools and cost drivers for the coming year as follows. The sales team has received an order for 1500 seats and produced them. The...

Q: Zigbee & Associates is a local legal entity employing six solicitors,

Zigbee & Associates is a local legal entity employing six solicitors, four paralegals and six administrative staff. The entity has a costing system that assigns costs to clients. There are two dep...

Q: Willow and Glen is a public accounting entity that offers auditing and

Willow and Glen is a public accounting entity that offers auditing and tax services to local small entities. The partners are in dispute over who contributes the greater amount to the entityâ
...

Q: Nicole is an engineer on temporary assignment at a refinery operation in

Nicole is an engineer on temporary assignment at a refinery operation in Seaside. She has reviewed a cost estimate for $430,000, which covers some new processing equipment for the ethylene line. The e...

Q: The municipal water and desalinization utility in a California city currently allocates

The municipal water and desalinization utility in a California city currently allocates some costs for maintenance shop workers to pumping stations based on the number of pumps at each station. At the...

Q: A chemical engineer at Western Refining estimated the total cost for a

A chemical engineer at Western Refining estimated the total cost for a diesel fuel desulfurization system at $2.3 million. If the direct cost factor is 1.55 and the indirect cost factor is 0.43, what...

Q: The delivered equipment cost for a fully equipped CNC machining system is

The delivered equipment cost for a fully equipped CNC machining system is $1.6 million. The direct cost factor is 1.52 and the indirect cost factor is 0.31. Estimate the total plant cost if the indire...

Q: During a major expansion in 2004, Douwalla’s Import Company developed a

During a major expansion in 2004, Douwalla’s Import Company developed a new processing line for which the delivered equipment cost was $1.75 million. This year, the board of directors decided to expan...

Q: The company you work for currently allocates insurance costs on the basis

The company you work for currently allocates insurance costs on the basis of cost per direct labor hour. This indirect cost component for the year is budgeted at $36,000. If the annual direct labor ho...

Q: The delivered equipment cost for setting up a production and assembly line

The delivered equipment cost for setting up a production and assembly line for high-sensitivity, gas-damped accelerometers is $650,000. If the direct cost and indirect cost factors are 1.36 and 0.31,...

Q: If a hospital cafeteria is the activity to receive indirect cost allocation

If a hospital cafeteria is the activity to receive indirect cost allocation for the year, cost driver(s) for the ABC method that seem reasonable may be: 1 – Number of cafeteria employees 2 – Number of...

Q: The delivered equipment cost for setting up a production and assembly line

The delivered equipment cost for setting up a production and assembly line for two-way floating ball valves is $650,000. If the direct cost and indirect cost factors are 1.82 and 0.31, respectively, a...

Q: Listed below are costs found in various organizations. 1.

Listed below are costs found in various organizations. 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons’ commissions. 4. Sup...

Q: 21. Direct materials are / 22.

21. Direct materials are 22. Which of the following costs would be included in manufacturing overhead for a computer manufacturer? a. The cost of the USB port hardware b. The wages paid to hardware...

Q: Several costs incurred by Bayview Hotel and Restaurant are given in the

Several costs incurred by Bayview Hotel and Restaurant are given in the following list. For each cost, indicate which of the following classifications best describe the cost. More than one classificat...

Q: Kubin Company’s relevant range of production is 18,000 to 22

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Required: 1. Assume the co...

Q: Northwest Hospital is a full-service hospital that provides everything from

Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicat...

Q: Why might the classification of a cost as a direct cost or

Why might the classification of a cost as a direct cost or an indirect cost of a cost object change over time?

Q: How can an individual cost item, such as the salary of

How can an individual cost item, such as the salary of a plant security guard, be both a direct cost and an indirect cost at the same time?

Q: Wolfgang Iser, the accountant of Starkuchen, wants to further examine

Wolfgang Iser, the accountant of Starkuchen, wants to further examine the relative profitability of raisin cake and layered carrot cake. He questions the accuracy of the activity-based normal costing...

Q: Hardhat Ltd.’s budget committee, which has members drawn from

Hardhat Ltd.’s budget committee, which has members drawn from all the major functions in the business, is meeting to consider the projected income statement for 2020/2021, which is c...

Q: In November 2020, a consultant was employed to review and document

In November 2020, a consultant was employed to review and document the planning and control systems of Integrated Technology Services (UK) Ltd (ITS-UK), to ensure that these were effectively meeting t...

Q: A direct cost has been defined as ‘a cost that can

A direct cost has been defined as ‘a cost that can be easily and economically identified with a particular department, section product or unit’. Critically examine this definition from a non accountin...

Q: Use the following information to compress one time unit per move using

Use the following information to compress one time unit per move using the least-cost method. Assume the total indirect cost for the project is $2,000 and there is a savings of $100 per time unit redu...

Q: Comment critically on the following statements that you have overheard:

Comment critically on the following statements that you have overheard: (a) ‘Direct labour hours are the most appropriate basis to use to charge indirect cost (overheads) to jobs in the modern manufa...

Q: Badgers Ltd, a business that provides a market research service,

Badgers Ltd, a business that provides a market research service, operates a job costing system. Towards the end of each financial year, the overhead recovery rate (the rate at which indirect cost will...

Q: 16. Which of the following items will appear in a job

16. Which of the following items will appear in a job cost record? (a) A budget plan for the job (b) An organisation chart for the job (c) Cost of direct materials for the job (d) A working capita...

Q: Encompass Health Corporation (formerly HealthSouth Corporation) claims to be “

Encompass Health Corporation (formerly HealthSouth Corporation) claims to be “a leading provider of integrated healthcare services, offering both facility-based and home-based patient care through our...

Q: Vulcan College School of Business is divided into three departments: accounting

Vulcan College School of Business is divided into three departments: accounting, marketing, and management. Relevant information for each of the departments follows. Vulcan is a private school that ex...

Q: Ludmilla Construction Company is composed of two divisions: (1)

Ludmilla Construction Company is composed of two divisions: (1) Home Construction and (2) Commercial Construction. The Home Construction Division is in the process of building 12 houses and the Commer...

Q: Tilley Professional Services is composed of two separate divisions: (1

Tilley Professional Services is composed of two separate divisions: (1) tax services as provided by the tax department and (2) auditing services as provided by the audit department. Each department ha...

Q: The Huffman School of Vocational Technology has organized the school training programs

The Huffman School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dent...

Q: Fokine Research Institute has three departments: biology, chemistry, and

Fokine Research Institute has three departments: biology, chemistry, and physics. The institute’s controller wants to estimate the cost of operating each department. He has identifie...

Q: Fletcher Corporation has hired a marketing representative to sell the company’s two

Fletcher Corporation has hired a marketing representative to sell the company’s two products: Marvelous and Wonderful. The representative’s total salary and fringe benefits are $8,000 monthly. The pro...

Q: Why are the terms direct cost and indirect cost independent of the

Why are the terms direct cost and indirect cost independent of the terms fixed cost and variable cost? Give an example to illustrate.

Q: Blueback Manufacturing has four divisions named after its locations: China,

Blueback Manufacturing has four divisions named after its locations: China, Cambodia, Bangladesh, and India. Corporate headquarters is in Minnesota. Blueback corporate headquarters incurs $8,400,000 p...

Q: Phoenix Medical Associates operates a walk-in medical clinic in Tempe

Phoenix Medical Associates operates a walk-in medical clinic in Tempe, Arizona. The clinic includes two different departments, Urgent Care, which serves patients with minor to moderate acute illnesses...

Q: Which of the following statements regarding department costing and ABC is/

Which of the following statements regarding department costing and ABC is/are correct? I. Department costing systems always properly recognize the drivers of costs within departments. II. Emphasizing...

Q: Clayton Solutions de- signs Web pages for clients in the education

Clayton Solutions de- signs Web pages for clients in the education sector. The company’s job-costing system has a single direct cost category (Web-designing labor) and a single indir...

Q: The Jerico store of Jiffy Mart, a chain of small neighborhood

The Jerico store of Jiffy Mart, a chain of small neighborhood convenience stores, is preparing its activity-based budget for January 2021. Jiffy Mart has three product categories: soft drinks (35% of...

Q: Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting

Jiffy Mart has a Kaizen (continuous improvement) approach to budgeting monthly activity costs for each month of 2021. Each successive month, the budgeted cost-driver rate decreases by 0.4% relative to...