163.Use the Hamilton Company's investment center information below to calculate (a) return on total investment and (b) investment center residual income.
Net Income$315,900
Average Invested Assets$2,100,000
Target Net Income6% of division assets
164.City Park College allocates administrative costs to its teaching departments based on the number of students enrolled, while maintenance and utilities are allocated based on square feet of classrooms. Based on the information below, what is the total amount of expenses allocated to each department (rounded to the nearest dollar) if administrative costs for the college were $180,000, maintenance expenses were $70,000, and utilities were $85,000?
Teaching
Department
StudentsSize of
Classroom
Electronics117900 sq. ft.
Automotive156750 sq. ft.
Computers4291,200 sq. ft.
Plumbing78150 sq. ft.
Allocation of Administrative costs of $180,000:
165.Arkansas Toys, a retail store, has three sales departments supported by two service departments. Cost and operational data for each department follow:
Sales
Department
SalesCost of
Goods SoldSquare
FootagePurch.
Orders Issued
1$92,160 $36,8641,7281,260
269,12032,8323,0241,680
380,64032,2561,2962,310
Service
Departments
Allocation Basis
Cost
AdvertisingSales$10,000
PurchasingNo. of purchase orders issued12,000
Determine the service department expenses to be allocated to Sales Department 1 for (round answers to whole dollars):
Advertising ___________________
Purchasing __________________
166.Chancellor Company is divided into four departments. Departments A and B are service departments and Departments 1 and 2 are operating (production) departments. The services of the two service departments are used by the other departments as follows:
Dept. ADept. BDept. 1Dept. 2
Services of:
Department A 50%20%30%
Department B 40%60%
Direct costs incurred by each department$60,000$50,000$70,000$80,000
Complete the following table:
Allocation of Expenses to Departments
Department ADepartment BDepartment 1Department 2
Total direct
Department expenses$60,000$50,000$70,000$80,000
Service department expenses
Department A
Subtotal
DepartmentB
Total
167.Sturdivant Fasteners Co., uses a traditional allocation of overhead based on direct labor hours system. The manager has accumulated the following information on engineering changes, which are indirect cost of their products, for two of the company's major products:
Automotive FastenersComputer Fasteners
Total units produced5,0002,500
Cost per engineering change$400$400
Number of engineering changes525
Direct labor hours per unit44
Compute the cost per unit using: The traditional two-stage allocation of the costs of engineering changes based on direct labor hours.