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ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost...

ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made Accounting 500,000 number of invoices processed Personnel 400,000 number of employees ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses 50,000 70,000 100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 The support department allocation rate for the Accounting Department is a.$714 b.$250 c.$625 d.$0.004

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department allocation rate for the Personnel Department is

a.$2,758

b.$1,000

c.$3,200

d.$3,077

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department cost that will be allocated to the Micro Division is

a.$145,000

b.$345,000

c.$60,000

d.$200,000

ABC Corporation has three support departments with the following costs and cost drivers:

Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees

ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:

Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125

The support department cost that will be allocated to the Macro Division is

a.$305,000

b.$405,000

c.$130,000

d.$175,000

Solutions

Expert Solution

1) Total number of invoices processed= 700+800+500= 2000

Support department allocation rate for the Accounting Department= Cost of accounting department/Total number of invoices processed

= $500,000/2,000= $250

So, the answer is option B) $250

2) Total number of employees= 130+145+125= 400

Support department allocation rate for the Personnel Department= Cost of personnel department/Total number of employees

= $400,000/400

= $1,000

So, the answer is option B) $1,000

3) Total number of copies= 20,000+30,000+50,000= 100,000

Support department allocation rate for the Graphics Production= Cost of Graphics Production department/Total number of copies

= $200,000/100,000= $2

Calculation of the support department cost that will be allocated to the Micro Division

Support Department Micro
Graphics Production ($2*20,000) $40,000
Accounting ($250*700) 175,000
Personnel ($1,000*130) 130,000
Total cost allocated $345,000

So, the answer is option B) $345,000

4) Calculation of the support department cost that will be allocated to the Macro Division

Support Department Micro
Graphics Production ($2*30,000) $60,000
Accounting ($250*800) 200,000
Personnel ($1,000*145) 145,000
Total cost allocated $405,000

So, the answer is option B) $405,000

NOTE:- For any problem regarding the answer please ask in the comment section.

ekkarill92 answered 9 months ago
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