Reference no: EM132432021

Question -

Part A) Alpha Company has two service departments (Cafeteria Services & Maintenance Services). Alpha has two production departments (Printing Department & Binding Department.) Cafeteria Services has costs of $140,000 and are allocated to production departments based on their number of employees. Employees are:

Cafeteria Services 2

Maintenance Services 2

Printing Department 4

Binding Department 8

Alpha uses the direct method for service cost allocation. Use this information to determine for Alpha Company the dollar amount of its Cafeteria costs that are to be absorbed by:

1. The Maintenance Service Department.

2. The Printing Department.

3. The Binding Department.

Part B) Alpha Company has two service departments (Cafeteria Services & Maintenance Services). Alpha has two production departments (Printing Department & Binding Department.) Cafeteria Services has costs of $140,000 and are allocated to production departments based on their number of employees. Employees are:

Cafeteria Services 2

Maintenance Services 2

Printing Department 4

Binding Department 8

Alpha uses the step method for service cost allocation. Use this information to determine for Alpha Company the dollar amount of its Cafeteria costs that are to be absorbed by:

1. The Printing Department

2. The Binding Department

Part C) During FY 2016, Bravo Company sold 16,000 units for $84,000. Bravo had $2.75 variable costs per unit sold. Bravo also reported $28,000 of fixed costs. Use this information to determine FY 2016:

1. Contribution Margin per unit

2. Breakeven in Units

3. Breakeven in Total Sales.