Hartz Co, Which Began Operations on January 1, 2015, Appropriately Uses

question 110

Multiple Choice

Hartz Co., which began operations on January 1, 2015, appropriately uses the installment-sales method of accounting. The following information pertains to Hartz's operations for the year 2015: $\begin{array}{lr}\text { Installment sales } & \$ 2,400,000 \\\text { Regular sales } & 960,000 \\\text { Cost of installment sales } & 1,440,000 \\\text { Cost of regular sales } & 576,000 \\\text { General and administrative expenses } & 192,000 \\\text { Collections on installment sales } & 576,000\end{array}$ The deferred gross profit account in Hartz's December 31, 2015 balance sheet should be

• A) $230,400.
• B) $384,000.
• C) $729,600.
• D) $960,000.

Classify departments as either support or production departments.

Understand the rationale behind selecting cost allocation methods based on the manufacturing process or support service provided.

Apply cost allocation principles to real-life scenarios, enhancing decision-making related to joint product costing and support department cost allocation.

Calculate the proportional usage and dollar amount of support department costs allocated to production departments.