Cost Allocation and Profitability at Hers Realtors Property Management In the property management business, empty units are lost money. Not only are they lost revenue, they have associated costs with them such as taxes, electricity, and yard upkeep. An empty unit represents a direct allocated cost for that unit. Per customer profitability increases with long term renters. When a renter vacates a property it will sit empty for a minimum of one month or more. Turnaround on units varies and with
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trucks around the warehouse to accumulate the cartons of items and prepare them for shipment. MOP ordered supplies from many different manufacturers. It priced products to its end-use customers by first marking up the purchased product cost by 16% to cover the cost of warehousing, order processing, and freight. Then it added another 6% markup to cover the general, selling, and administrative expenses, plus an allowance for profit. The markups were determined at the start of each year, based on actual
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ACC650 Module 7 - Quiz Product Costing Systems and Cost Allocation Click Link Below To Buy: http://hwcampus.com/shop/acc650-module-7-quiz-product-costing-systems-cost-allocation/ 1) Indiana Company incurred the following costs during the past year when planned production and actual production each totaled 20,000 units: a. Direct material used $280,000 b. Direct labor $120,000 c. Variable manufacturing overhead $160
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Chapters 15 and 16 1) The single-rate cost-allocation method may base the denominator choice on: A) master-budget capacity utilization B) normal capacity utilization C) practical capacity D) All of these answers are correct. 2) Benefits of the single-rate method include: A) the low cost of implementation B) fixed costs that are transformed into variable costs for user decision making C) signals regarding how variable and fixed costs behave differently D) information that
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describe the differences in the four allocation methods discussed in the case. From your standpoint, which of the four methods is conceptually the most reasonable? Why? Direct allocation: each support department costs are allocated directly to the service departments that use the services. The direct allocation method is relatively simple to apply. None of the costs of providing support services is allocated to other support departments. Only the direct costs of the support departments are allocated
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Case 3: Big Bend Medical Center What are the advantages and disadvantages of the new methodology? Advantages Makes cost allocation more fair Recognizes it’s true quality Could give a break because they are using the Same equipment and staff Dialysis Center is already using the same equipment and personnel Is there a better way? In order to offset the large facility costs; the Dialysis center should be able to claim revenues on direct utilization of pharmaceutical supplies; increasing their
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up." The company has three divisions, electronics, fiber optics, and plumbing supplies. Blake has no interest in plumbing supplies, and one of the first things he did was to put pressure on his accountants to reallocate some of the company’s fixed costs away from the other two divisions to the plumbing division. This had the effect of causing the plumbing division to report losses during the last two years; in the past it had always reported low, but acceptable, net income. Blake felt that this reallocation
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to keep the Craddock Cup, I have reviewed the profit statement that you have constructed and have found a few discrepancies that I would like to bring to your attention. The first of which is the expense allocation of the City field rental from CYSL to the Craddock cup of $1,200. This allocation should be eliminated. CYSL rents 10 soccer fields from the city for 40 weeks a year for a total fee of $48,000. Although the Cup requires the use of the fields for one week during the year, the $48,000
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detailed information about the costs associated with sub assemblies. They wish to make an attractive but profitable bid for the contract. STRUCTURE OF EDD. EDD has four separate production departments: Data Encoding (DE), Video Encoding (VE), Voice Ratio Encoding (VRE) and Variable Wire Encoding. This specific contract is exclusive to VRE. EDD therefore need to ensure that they have the correct division of costs between each production department and that the cost for each department is then
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Joint costs—the costs of a production process that yields multiple products simultaneously Splitoff point—the juncture in a joint production process where two or more products become separately identifiable Separable costs—all costs incurred beyond the splitoff point that are assignable to each of the specific products identified at the splitoff point Categories of joint process outputs: 1. Outputs with a positive sales value 2. Outputs with a zero sales value Product—any output
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