Support activity cost allocation
Jake’s Gems mines and produces diamonds, rubies, and other gems. The gems are produced by way of the Mining and Cutting activities. These production activities are supported by the Maintenance and Security activities. Security costs are allocated to the production activities based on asset value. Maintenance costs are normally allocated based on machine hours. However, Maintenance costs typically correlate more with the number of service calls. Information regarding the activities is provided in the following table:
Number of service calls
1. Is the process of allocating maintenance costs based on machine hours correct? Identify the measure than can possibly be used to allocate the maintenance costs.
Measures that can possibly be used to allocate the maintenance costs.
a. Number of service calls
b. Asset value
c. Department cost
d. None of the above
2. Based on your response to part (1), determine the total costs allocated from each support activity to the other activities using the reciprocal services method and the most appropriate cost driver for Maintenance.
Maintenance cost allocation
Security cost allocation
Production activities total costs
3. Assume Jake’s Gems is considering cutting costs by switching to a simpler support activity cost allocation method. Determine the total costs allocated from each support activity to the other activities.
Production activities total cost
Is it viable for the company to choose the direct method of cost allocation?
Which of the following supports your answer?
a. The direct cost allocation method is too simple and it is not accurate.
b. The difference between the direct cost allocation method and the reciprocal method is minimal and the direct method is easier.
c. The reciprocal method of cost allocation is more accurate and easier than the direct method.
d. None of the above.
Find the Thévenin equivalent of the source circuit to the left of the interface in Figure P8–54. Then use the equivalent circuit to find the steady-state voltage v (t) an...Jul 27 2020
How large can such a company get before it needs to change its culture and structure >May 15 2020
Please help me with these macroeconomic questions. Thank you somuch.1. A more efficient means of processing tree bark to produce an anti cancerdrug is discovered. As a re...May 18 2018
Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $8.50 per share and has announced that it will increase the dividend by $6.50 per sha...Apr 03 2020
4-10 The operations manager of a musical instrument distributor feels that demand for bass drums may be related to the number of television appearances b y the popular ro...Jul 24 2020
The pure interest yieldA. reflects the expectation that the loanwill be repaid with dollars of less purchasing power.B. is the real price one must pay forearlier availabi...Jun 15 2018
3.)The following bearings were observed in traversing , with a compass an area where local attraction was suspected , Find the amounts of local attraction at different st...Jul 02 2020
QuestionQuality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs...Apr 22 2020
Ackerman Co. has 9 percent coupon bonds on the market with eight years left to maturity. The bonds make annual payments. If the bond currently sells for $1,123.94, what i...Dec 02 2019
There following excerpts are from the financial statement note on Derivative Instruments and Hedging Activities in Molson Coors Brewing Company’s 2009 annual report:Simul...May 24 2020
Welcome to MyCourseHelp Services, World's leading Academic solutions provider with Millions of Happy Students.