Tenet Engineering, Inc operates two user divisions as separate cost objects. To

Question

Tenet Engineering, Inc operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred: Computer services (85% fold Building occupancy Personnel costs Total common costs s 294,000 662,000 19,000 1,075,000 The following information is available concerning various activity measures and service usages by each of the divisions: Division B 54,400 s 475,000 275,000 410 Division A 27200 Area occupled (square feet) Payroll Computer time hours) Compute storage (megabytes) Equipment value Operating profit ore-allocations) 390 4,050 $ 266,000316,000 $ 710,000 650,000 common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division t is t O $187817 O $152331 O $158.928 O $150.67s

Explanation / Answer

The answer is $150,675.

Reason: The Common computer service cost allocated to division B is :

computer service cost = $294,000

Computer time is 410

Total computer time is 800

hence the common computer service cost allocated to division B is ($294,000*410/800)=$150,675

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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