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Author Question: The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight ... (Read 100 times)

joesmith1212

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Question 1

The static-budget variance is the difference between an actual result and the corresponding budgeted amount in the static budget.
◦ true
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Question 2

The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:

Budgeted costs of the operating the plant
for 10,000 to 20,000 hours:
Fixed operating costs per year$280,000
Variable operating costs$10per hour
Practical capacity20,000hours per year
Budgeted long-run usage per year:
Lamp Division800 hours × 12 months =9,600hours per year
Flashlight Division450 hours × 12 months =5,400hours per year 

Assume that practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Lamp Division was 700 hours and the Flashlight Division was 400 hours for the month of June. 

Required:
a.  If a single-rate cost-allocation method is used, what amount of operating costs will be budgeted for the Lamp Division each month? For the Flashlight Division each month? 

b.  For the month of June, if a single-rate cost-allocation method is used, what amount of cost will be allocated to the Lamp Division? To the Flashlight Division? Assume actual usage is used to allocate operating costs. 

c.  If a dual-rate cost-allocation method is used, what amount of operating costs will be budgeted for the Lamp Division each month? For the Flashlight Division each month? 

d.  For the month of June, if a dual-rate cost-allocation method is used, what amount of cost will be allocated to the Lamp Division? To the Flashlight Division? Assume budgeted usage is used to allocate fixed operating costs and actual usage is used to allocate variable operating costs.


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Marked as best answer by joesmith1212 on Mar 6, 2021

janieazgirl

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joesmith1212

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Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)


jomama

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Reply 3 on: Yesterday
Gracias!

 

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