【正文】 ngman ($26)(938) = 24,388 + 13,600 = 37,988Flagstaff ($26)(562) = 14,612 + 20,400 = 35,012Glendale ($26)(375) = 9,750 + 21,250 = 31,0001487–18 Concluded3. The method in Requirement 2 is better because it ties cost allocated to the driver that causes the cost. Thus, managers would be more likely to use accounting department time efficiently. The method in Requirement 1 assigns accounting costs on the basis of a variable, which may not be causally related. Also, a motel with stable sales from year to year may still experience wild fluctuations in allocated cost due to changing sales patterns of other motels.7–191. a. Relative salesvalueatsplitoff method:Monthly Sales Relative AllocatedUnit Price Sales Value Percent of JointOutput per Unit at SplitOff Sales CostsStuds ........................... 75,000 $ 8 $ 600,000 % $ 461,500Decorative pieces ..... 5,000 60 300,000 230,800Posts ........................... 20,000 20 400,000 307,700Total ....................... $ 1,300,000 % $ 1,000,000b. Physical units (volume) method at splitoff:Units Percent Joint Cost = Allocated Joint CostStuds.......................... 75,000 $1,000,000 $ 750,000Decorative pieces ..... 5,000 1,000,000 50,000Posts.......................... 20,000 1,000,000 200,000Total...................... 100,000 $1,000,000c. Estimated realizable value method:FullyProcessed EstimatedMonthly Sales Net AllocatedUnit Price Realizable Percent of JointOutput per Unit Value Value CostsStuds.......................... 75,000 $ 8 $ 600,000 % $ 444,400Decorative pieces ..... 4,500* 100 350,000** 259,300Posts.......................... 20,000 20 400,000 296,300Total...................... $1,350,000 % $ 1,000,000*5,000 monthly units of output – 10% normal spoilage = 4,500 good units.**4,500 good units $100 = $450,000 – Further processing cost of $100,000 = $350,000.1497–19 Concluded2. Monthly unit output........................................................ 5,000Less: Normal further processing shrinkage ................ 500Units available for sale ............................................. 4,500Final sales value (4,500 units $100 per unit) ........... $450,000Less: Sales value at splitoff ......................................... 300,000Differential revenue................................................... $150,000Less: Further processing costs .................................... 100,000Additional contribution from further processing......... $ 50,0007–201. Clearly, some expenses pertain to women living in the house, while others pertain to all members. Inhouse members use the second floor, most of the food, and most of the variable expenses. All members use the first floor facilities, food for Monday night dinners, and cereal and milk for snacks. HCB must determine a fair method of allocating the costs since the sorority is a nonprofit entity and house bills in total must equal house costs. It is difficult to allocate the costs precisely to the two types of members given the sketchy nature of the data.2. Using a benefitsreceived approach, the following charging rates might be applied.Inhouse members:Use of second floor ($240,000 – $40,000)/2 ............ $100,000Use of first floor [($240,000 – $40,000)/2]........... 60,000Food* ($)(60)(20)(32) .......................................... 38,784Variable expenses..................................................... 34,800Total..................................................................... $233,584Charging rate per inhouse member per year: $233,584/60 = $3,893*Cost per meal: $40,000/{[40 + (60 20)] 32} = $Outofhouse members:Use of first floor [($240,000 – $40,000)/2]........... $40,000Food ($)(32)(40) ................................................ 1,293Total..................................................................... $41,293Charging rate per outofhouse member per year: $41,293/40 = $1,032150 COLLABORATIVE LEARNING EXERCISE7–211. a. Direct methodPackagingCooking and FreezingMachine hours ........................ Kilowatthours ........................ Maintenance:( $340,000)............ $226,678( $340,000)............ $113,322Power:( $200,000)............ 111,120( $200,000)............ 88,880Direct costs ............................. 75,000 55,000$412,798 $257,202Cooking: $412,798/40,000 = $ per machine hourPackaging and freezing: $257,202/30,000 = $ per direct labor hourPrime costs............................................... $Cooking ($ 2) ................................ Packaging and freezing ($ ) ..... Total cost ............................................. $Markup (20%)............................................ Bid price............................................... $b. Sequential method:PackagingandMaintenance Power Cooking FreezingMachine hours................. — Kilowatt hours ................. — — Direct costs ..................... $ 340,000 $ 200,000 $ 75,000 $ 55,000Maintenance:( $340,000)..... (136,000) 136,000( $340,000)..... (136,000) 136,000( $340,000)..... (68,000) 68,000Power:( $336,000)..... (186,682) 186,682( $336,000)..... $ (149,318) 149,318$ 0$ 0 $ 397,682$ 272,3181517–21 ContinuedCooking: $397,682/40,000 = $ per machine hourPackaging and freezing: $272,318/30,000 = $ per direct labor hourPrime costs............................................... $Cooking ($ 2) .................................. Packaging and freezing ($ ) ... Total cost...................