The centralized computer technology department of Lee Company has expenses of $264,000

The centralized computer technology department of Lee Company has expenses of $264,000. The department has provided a total of 2,500 hours of service for the period. The Retail Division has used 1,125 hours of computer technology service during the period, and the Commercial Division has used 1,375 hours of computer technology service. How much should each division be charged for computer technology department services?

Answer:
Retail Division Service Charge for Computer Technology Department:
$118,800 = 1,125 billed hours × ($264,000 ÷ 2,500 hours billed)

Commercial Division Service Charge for Computer Technology Department:
$145,200 = 1,375 billed hours × ($264,000 ÷ 2,500 hours billed)

The centralized employee travel department of Kensy Company has expenses of $435,000

The centralized employee travel department of Kensy Company has expenses of $435,000. The department has serviced a total of 4,000 travel reservations for the period. The Northeast Division has made 1,800 reservations during the period, and the Pacific Division has made 2,200 reservations. How much should each division be charged for travel services?

Answer:

Northeast Division Service Charge for Travel Department: 

$195,750 = 1,800 billed reservations × ($435,000 ÷ 4,000 reservations) 

Pacific Division Service Charge for Travel Department: 

$239,250 = 2,200 billed reservations × ($435,000 ÷ 4,000 reservations) 

Mandel Company’s costs were over budget by $252,000. The company is divided into West and East regions

Mandel Company’s costs were over budget by $252,000. The company is divided into West and East regions. The East Region’s costs were under budget by $74,000. Determine the amount that the West Region’s costs were over or under budget.

Answer:
$326,000 over budget ($252,000 + $74,000)

Conley Company’s costs were under budget by $198,000. The company is divided into North and South regions

Conley Company’s costs were under budget by $198,000. The company is divided into North and South regions. The North Region’s costs were over budget by $52,000. Determine the amount that the South Region’s costs were over or under budget.

Answer:
$250,000 under budget ($198,000 + $52,000)

The following are inputs and outputs to the cooking process of a restaurant:

The following are inputs and outputs to the cooking process of a restaurant:

Number of times ingredients are missing
Number of customer complaints
Number of hours kitchen equipment is down for repairs
Number of server order mistakes
Percent of meals prepared on time
Number of unexpected cook absences

Identify whether each is an input or output to the cooking process.

Answer:
Number of times ingredients are missing……………………………………………Input
Number of customer complaints………………………………………………………Output
Number of hours kitchen equipment is down for repairs…………………………Input
Number of server order mistakes………………………………………………………Input
Percent of meals prepared on time……………………………………………………Output
Number of unexpected cook absences………………………………………………Input

Prepare a 2014 income statement through gross profit for Dvorak Company, using the variance data

Prepare a 2014 income statement through gross profit for Dvorak Company, using the variance data in Practice Exercises 23-1B, 23-2B, 23-3B, and 23-4B. Assume Dvorak sold 1,000 units at $90 per unit.

Answer:


DVORAK COMPANY 
Income Statement Through Gross Profit 
For the Year Ended December 31, 2014 
Sales (1,000 units × $90) $90,000 
Cost of goods sold—at standard* 69,500 
Gross profit—at standard $20,500 
    F
avorable Unfavorable  
Less variances from standard cost:    
Direct materials price (PE23–1B)  $2,250  
Direct materials quantity (PE23–1B) $1,250   
Direct labor rate (PE23–2B) 1,400   
Direct labor time (PE23–2B) 3,400   
Factory overhead controllable (PE23–3B) 200   
Factory overhead volume (PE23–4B)  300 3,700 
Gross profit   $24,200 
    
* Direct materials (1,000 units × 5 lbs. × $2.50)…………………………………………………… 

$12,500 
Direct labor (1,000 units × 3 hrs. × $17.00)……………………………………………………… 51,000 
Factory overhead [1,000 units × 3 hrs. × ($1.40 + $0.60)]………………………………………     6,000 
Cost of goods sold at standard…………………………………………………………………… $69,500 

The following are inputs and outputs to the copying process of a copy shop:Number of employee errors

The following are inputs and outputs to the copying process of a copy shop:

Number of employee errors

Number of times paper supply runs out

Copy machine downtime (broken)

Number of pages copied per hour

Number of customer complaints

Percent jobs done on time

Identify whether each is an input or output to the copying process.

Answer:

Number of employee errors…………………………………………………………… Input 

Number of times paper supply runs out……………………………………………  Input 

Copy machine downtime (broken)…………………………………………………… Input 

Number of pages copied per hour…………………………………………………… Output 

Number of customer complaints………………………………………………………Output 

Percent jobs done on time…………………………..………………………………… Output