Nesbit Co. has two operating (production) departments supported by a number of service departments. The...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Nesbit Co. has two operating (production) departments supported by a number of service departments. The following information was collected for a recent period:
Direct Costs
Machining
Department
Assembly
Department
Indirect
Cost
Salaries
$122,400
$ 85,700
$36,700
Insurance
20,200
11,000
5,500
Utilities
23,900
13,900
2,000
Depreciation
20,700
11,500
13,800
Maintenance
7,000
4,700
29,400
Office expenses
-0-
-0-
71,100
Cost of goods sold
327,600
121,200
Indirect costs are allocated as follows: salaries on the basis of sales, office expenses on the basis of the number of employees, and all other costs on the basis of square footage. Additional information about the production departments follows:
Square Number of
Footage Employees
Machining 14,535 78
Assembly 4,845 52
Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796. Determine the departmental contribution to overhead and the departmental net income for each production department.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
