Steamco is reviewing its operations to see what additional energy-saving projects it might adopt. The...
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Steamco is reviewing its operations to see what additional energy-saving projects it might adopt. The company's manufacturing plant generates its own electricity using a process capturing steam from its production processes. A summary of the use of service departments by other service departments as well as by the two producing departments at the plant follows: Steam Generation Fixed Costs Services Used by Variable Equipment Costs Maintenance 0.40 Alpha 0.10 Beta 0.50 Service Department Steam Generation Electric Generating Fixed costs Variable costs Equipment Maintenance 0.10 0.10 0.20 0.10 0.05 0.30 0.55 0.50 0.50 0.30 0.15 0.10 0.05 Direct costs in thousands) in the various departments follow: Direct Cost $ 200.00 Department Steam Generation (51) Electric Generating: Fixed costs (52) Variable costs (53) Equipment Maintenance (54) Production Alpha (P1) Beta (P2) 80.00 226.00 128.00 1,600.00 1,220.00 Steamco currently allocates costs of service departments to production departments using the step method. The local power company indicates that it would charge $480,000 per year for the electricity that Steamco now generates internally. Management rejected switching to the power company on the grounds that its rates would cost more than the $306,000 ($80,000 + $226,000) cost of the present, company-owned, system. Required: a. What costs of electric service did management use to prepare the basis for its decision to continue generating power internally? b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. Use the step method.) The. b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) S1, (2) S4, (3) S2, and (4) S3. b-2. Should management continue to generate power internally? c-1. Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. C-2. Should management continue to generate power internally? Complete this question by entering your answers in the tabs below. Reg A Req B1 Reg B2 Reg C1 Reg C2 Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) Si, (2) S4, (3) S2, and (4) S3. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in thousands of dollars rounded to 2 decimal places.) Show less S3 From Amount to be allocated 1 S4 S2 P1 P2 Direct department costs Steam generation (S1) Equipment maintenance (54) Electric generating - fixed (S2) Electric generating - variable (S3) Total $ 0.00 $ 0 $ 0 $ 0 $ 0.00 $ 0.00 Total cost of company owned system Required: a. What costs of electric service did management use to prepare the basis for its decision to continue generating power internally? b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) S1, (2) S4, (3) S2, and (4) S3. b-2. Should management continue to generate power internally? -1. Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. c-2. Should management continue to generate power internally? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Reg C1 Reg C2 Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. (Enter your answer in thousands of dollars. Round your answer to 2 decimal places.) Total relevent internal costs Steamco is reviewing its operations to see what additional energy-saving projects it might adopt. The company's manufacturing plant generates its own electricity using a process capturing steam from its production processes. A summary of the use of service departments by other service departments as well as by the two producing departments at the plant follows: Steam Generation Fixed Costs Services Used by Variable Equipment Costs Maintenance 0.40 Alpha 0.10 Beta 0.50 Service Department Steam Generation Electric Generating Fixed costs Variable costs Equipment Maintenance 0.10 0.10 0.20 0.10 0.05 0.30 0.55 0.50 0.50 0.30 0.15 0.10 0.05 Direct costs in thousands) in the various departments follow: Direct Cost $ 200.00 Department Steam Generation (51) Electric Generating: Fixed costs (52) Variable costs (53) Equipment Maintenance (54) Production Alpha (P1) Beta (P2) 80.00 226.00 128.00 1,600.00 1,220.00 Steamco currently allocates costs of service departments to production departments using the step method. The local power company indicates that it would charge $480,000 per year for the electricity that Steamco now generates internally. Management rejected switching to the power company on the grounds that its rates would cost more than the $306,000 ($80,000 + $226,000) cost of the present, company-owned, system. Required: a. What costs of electric service did management use to prepare the basis for its decision to continue generating power internally? b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. Use the step method.) The. b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) S1, (2) S4, (3) S2, and (4) S3. b-2. Should management continue to generate power internally? c-1. Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. C-2. Should management continue to generate power internally? Complete this question by entering your answers in the tabs below. Reg A Req B1 Reg B2 Reg C1 Reg C2 Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) Si, (2) S4, (3) S2, and (4) S3. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Enter your answers in thousands of dollars rounded to 2 decimal places.) Show less S3 From Amount to be allocated 1 S4 S2 P1 P2 Direct department costs Steam generation (S1) Equipment maintenance (54) Electric generating - fixed (S2) Electric generating - variable (S3) Total $ 0.00 $ 0 $ 0 $ 0 $ 0.00 $ 0.00 Total cost of company owned system Required: a. What costs of electric service did management use to prepare the basis for its decision to continue generating power internally? b-1. Prepare for management an analysis of the costs of the company's own electric generating operations. (Use the step method.) The rank order of allocation is (1) S1, (2) S4, (3) S2, and (4) S3. b-2. Should management continue to generate power internally? -1. Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. c-2. Should management continue to generate power internally? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Reg C1 Reg C2 Assume the company could realize $194,000 per year from the sale of the steam now used for electric generating after selling costs. Compute the total relevant internal costs for the company. (Enter your answer in thousands of dollars. Round your answer to 2 decimal places.) Total relevent internal costs
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