Week 5 Practice Text Exercises Acc 561
Practice Text Exercises
Karen V. Lawrence, Charita Dixon, Brian Swift, Javon Lewis, Cecelia Byrd
ACC 561
June 21, 2011
Michael T. Bradford
Practice Text Exercises
Excel 12-59 Allocating Costs Using Direct and Step-Down Methods (p. 584)
Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown method. Use the results to answer questions about your findings.
Scenario: Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments. Additional background information for your spreadsheet appears in Fundamental Assignment Material
12-B2. Exhibit 12-4 on page 532 illustrates the types of calculations that are used for allocating costs using the direct method and the step-down method.
Chapter 12: Cost Allocation 585
When you have completed your spreadsheet, answer the following questions: 1. What are the total costs for the Residential department using the direct method?
$300,158
What are the total costs for the Commercial department using the direct method? $467,105 2. What are the total costs for the Residential department using the step-down method?
$302,921
3. What are the total costs for the Commercial department using the step-down method?
$471,711
4. Which method would you recommend that Antonio Cleaning use to allocate their service departments’ costs to their producing departments? Why? I would recommend that Antonio Cleaning Services allocates the costs using the step-down method as it recognizes that some service departments provide services to other service departments as well as to producing departments
12-59 Excel Spreadsheet:
See attachment at the end of team C paper.
13-B3 Comparison of Variable Costing and Absorption Costing (p. 617)
Consider the following information pertaining to a year’s operations of Youngstown Manufacturing:
Units sold 1,400
Units produced
Karen V. Lawrence, Charita Dixon, Brian Swift, Javon Lewis, Cecelia Byrd
ACC 561
June 21, 2011
Michael T. Bradford
Practice Text Exercises
Excel 12-59 Allocating Costs Using Direct and Step-Down Methods (p. 584)
Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown method. Use the results to answer questions about your findings.
Scenario: Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments. Additional background information for your spreadsheet appears in Fundamental Assignment Material
12-B2. Exhibit 12-4 on page 532 illustrates the types of calculations that are used for allocating costs using the direct method and the step-down method.
Chapter 12: Cost Allocation 585
When you have completed your spreadsheet, answer the following questions: 1. What are the total costs for the Residential department using the direct method?
$300,158
What are the total costs for the Commercial department using the direct method? $467,105 2. What are the total costs for the Residential department using the step-down method?
$302,921
3. What are the total costs for the Commercial department using the step-down method?
$471,711
4. Which method would you recommend that Antonio Cleaning use to allocate their service departments’ costs to their producing departments? Why? I would recommend that Antonio Cleaning Services allocates the costs using the step-down method as it recognizes that some service departments provide services to other service departments as well as to producing departments
12-59 Excel Spreadsheet:
See attachment at the end of team C paper.
13-B3 Comparison of Variable Costing and Absorption Costing (p. 617)
Consider the following information pertaining to a year’s operations of Youngstown Manufacturing:
Units sold 1,400
Units produced
References: Horngren, C. T., Sundem, G. L., Stratton, W.O., Burgstahler, D, and Schatzberg, J.,. Published by Prentice Hall. Copyright © 2008 by Pearson Education, Inc. Excel Application 12-59 p. 584