ACC 500 Homework Assignment - Chapter 17

1. Buy
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pter-17/
Product Description
E12-29 (similar to)p. 483
The city of Seattle signed a lease for a photocopy machine at $3,200 per month and
$0.02 per copy. Operating costs for toner, paper, operator salary, and so on are all
variable at $0.03 per copy. Departments had projected a need for 105,000 copies a
month. The city planning department predicted its usage at 34,000 copies a month. It
made 41,000 copies in August.
Requirement 1. Suppose one predetermined rate per copy was used to allocate all
photocopy costs. What rate would be used and how much cost would be allocated to
the city planning department in August? (Round your answer to three decimal
places.)
Requirement 2. Suppose fixed- and variable-cost pools were allocated separately.
Specify how each pool should be allocated. Compute the cost allocated to the city
planning department in August.
Requirement 3. Which method, the one in number 1 or the one in number 2, do you
prefer? Explain.
E12-32 (similar to)p.487

2. Jones Manufacturing has two producing departments, machining and assembly, and
two service departments, personnel and custodial. The company's budget for April
20X1 is as follows:
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Service Departments Production Departments
Personnel Custodial Machining Assembly
Direct department
costs
$46,000 $70,000 $620,000 $820,000
Square feet 2,800 1,500 10,200 25,400

3. Number of
employees
23 36 220 280
Jones allocates personnel costs on the basis of number of employees and custodial
costs on the basis of square feet.
E12-35 (similar to) p. 507
The output of one of Ramirez Chemical Company's production processes is two
solvents, Rexon and Texon. The two products cannot be separated until $430,000 of
processing costs have been incurred. At that point there are 14,300 gallons of Rexon
that can be sold for $23.80 per gallon and 7,700 gallons of Texon that can be sold for
$20.80 per gallon
P12-45 (similar to) p. 487
Donaldson Piano Company has two producing departments, traditional pianos and
electronic pianos. In addition, there are two service departments, building services
and materials receiving and handling.
The company purchases a variety of component parts from which the departments
assemble pianos for sale in domestic and international markets.

4. The electronic pianos division is highly automated. The manufacturing costs depend
primarily on the number of subcomponents in each piano. In contrast, the traditional
pianos division relies primarily on a large labor force to hand-assemble pianos. Its
costs depend on direct-labor hours.
The costs of building services depend primarily on the square footage occupied. The
costs of materials receiving and handling depend primarily on the total number of
components handled.
Pianos M1 and M2 are produced in the traditional pianos department, and E1 and E2
are produced in the electronic pianos department. Data about these products follow: