Questions:
1. Are the reports of departmental net income and the departmental contribution to overhead useful in assessing a department manager's performance? Explain.
2. Performance reports to evaluate managers should (a) include data about controllable expenses, (b) compare actual results with budgeted levels, or (c) both (a) and (b).
3. A company produces three products, B1, B2, and B3. The joint cost incurred for the current month for these products is $180,000. The following data relate to this month's production:
|
Product
|
Units Produced
|
Unit Sales Value
|
|
B1
|
96,000
|
$3.00
|
|
B2
|
64,000
|
6.00
|
|
B3
|
32,000
|
9.00
|
The amount of joint cost allocated to product B3 using the value basis allocation is (a) $30,000, (b) $54,000, or (c) $90,000.