Founder Consulting Corporation has its headquarters in Memphis and operates from

Question

Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville, Atlanta, and Louisville. Two of the company's activity cost pools are Administrative Service and Development Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows:

Estimated branch data for next year is as follows:

How much of the headquarters cost allocation should Nashville expect to receive next year?

Activity Cost Pool Activity Measure Estimated Cost Administrative service % of time devoted to branch $ 1,610,000 Development service Computer time $ 595,000

Explanation / Answer

Cost allocated to Nashville

= [ 50% * 1,610,000 ] + [ ( 1500,000 / 3000,000 )* 595,000 ]

= 805,000 + 297,500

= 1,102,500 .............. is the final answer

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.