90.2K

Verified Solution

Link Copied!

please answer both questions. thanks!

Required: Determine the total costs in each of the three operating departments, after departmental allocations, using (a) the direct method, (b) the step method (first for information technology going first in the allocation and then for operations going first), and (c) the reciprocal method. (Do not round intermediate calculations. Round final onswers to the nearest dollar.) Problem 7.41 (Algo) Departmental Cost Allocation; Service Company [LO 7-3, 7-5] Comprehensive insurance Company has two product lines: health insurance and auto insurance. The two product lines are served by three operating departments, which are necessary for providing the two types of products claims processing, administration, and sales. These three operating departments are supported by two departments. information technology and operations. The support provided by information technology and operations to the other departments is shown below. The total costs incurred in the five departments are: Required: Determine the total costs in each of the three operating departments, after departmental allocations, using (a) the direct method, (b) Johnston Achesives Company makes three widely used industrial adhesives. A101, A204, and B216. Sales and production information for each of the three adhesives are shown in the following table. Most of Johnston's customers ask for a special blend of the three products, which improves heat-resistance. The additional separable processing requires additional time and materials, and the price is increased accordingly, as shown in the table. Assume that Johnston produces only for specific customer orders, so there is no beginning or ending inventory. Assume also that all of Johnston's customers requested the heat-resistant version of the products so that all production required additional separable processing Total joint cost for the three products is $3,419,000 Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods. (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (c) the constant gross margin percentage method (Do not round intermediate calculations. Round cost per unit answers to 4 decimal places and gross margin answers to the nearest whole dollar. Negative amounts should be indicoted with a minus sign.) Required: 1. Calculate the unit product cost and total gross margin for each of the three product lines using the following methods. (a) physical measure method, (b) sales value at split-off method, (c) the net realizable value method, and (d) the constant gross margin percentage method. (Do not round intermediate calculations. Round cost per unit answers to 4 decimal places and gross margin answers to the nearest whole dollar. Negotive amounts should be indicoted with o minus sign.)

Answer & Explanation Solved by verified expert

See Answer