Question
In: Accounting
MediaForum has three operating groups: Games, News, and Documentaries. In May, the company incurred $43,200,000 of...
MediaForum has three operating groups: Games, News, and
Documentaries. In May, the company incurred $43,200,000 of joint
cost for facilities and administration.
May revenues and separate costs of each group are as
follows:
Games News Documentaries
Revenue $61,272,000 $55,296,000 $340,776,000
Separate costs 55,872,000 29,376,000 199,296,000
a. What amount of joint cost is allocated to each operating
group using the profit before joint cost allocation as the basis
for allocation?
Note: Compute the profit for each operating area after the
allocation.
Note: Round proportions to the nearest whole percentage and
dollar amounts to the
nearest whole dollar.
Games Answer
News Answer
Documentary Answer
Total Answer
b. What amount of joint cost is allocated to each operating
group if the allocation is based on revenue?
Note: Compute the profit for each operating group after the
allocation.
Note: Round proportions to the nearest whole percentage and
dollar amounts to the
nearest whole dollar.
Games Answer
News Answer
Documentary Answer
Total Answer
Solutions
Expert Solution
| Part a | ||||
| Games | News | Documanteries | Total | |
| Revenues | $ 61,272,000 | $ 55,296,000 | $ 340,776,000 | $ 457,344,000 |
| Less:Separate Costs | $ 55,872,000 | $ 29,376,000 | $ 199,296,000 | $ 284,544,000 |
| Profit before Joint allocation | $ 5,400,000 | $ 25,920,000 | $ 141,480,000 | $ 172,800,000 |
| Profit before Joint allocation | Percent of allocation | Joint Cost allocated | ||
| Games | $ 5,400,000 | 3% | $ 1,296,000 | |
| News | $ 25,920,000 | 15% | $ 6,480,000 | |
| Documanteries | $ 141,480,000 | 82% | $ 35,424,000 | |
| Total | $ 172,800,000 | $ 43,200,000 | ||
| Part b | ||||
| Revenues | Percent of allocation | Joint Cost allocated | ||
| Games | $ 61,272,000 | 13% | $ 5,616,000 | |
| News | $ 55,296,000 | 12% | $ 5,184,000 | |
| Documanteries | $ 340,776,000 | 75% | $ 32,400,000 | |
| Total | $ 457,344,000 | $ 43,200,000 | ||
ekkarill92 answered 1 year agoRelated Solutions
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