Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. 12-28 Allocation of Computer CostsReview the section Allocation of Service Department Costs, pages 483-490, especially the exampleof the use of the computer by the university. Recall that the budget formula was $100,000 fixed costmonthly plus $200 per hour of computer time used. Based on long-run predicted usage, the fixed costswere allocated on a lump-sum basis, 30% to business and 70% to engineering.1. Show the total allocation if business used 210 hours and engineering used 400 hours in a givenmonth. Assume that the actual costs coincided exactly with the budgeted amount for total usageof 610 hours.2. Assume the same facts as in number 1 except that the fixed costs were allocated on the basis ofactual hours of usage. Show the total allocation of costs to each school. As the dean of the Schoolof Business, would you prefer this method or the method in number 1? Explain.

The allocation of fixed costs can be as a percentage or on the basis of hours used which forms a…

1. Show the total allocation if business used 210 hours and engineering used 400 hours in a given month. Assume that the actual costs coincided exactly with the budgeted amount for total usage of 610 hours. 2. Assume the same facts as in number 1 except that the fixed costs were allocated on the basis of actual hours of usage. Show the total allocation of costs to each school. As the dean of the School of Business, would you prefer this method or the method in number 1? Explain.

1. Show the total allocation if business used 210 hours and engineering used 400 hours in a given month. Assume that the actual costs coincided exactly with the budgeted amount for total usage of 610 hours. 2. Assume the same facts as in number 1 except that the fixed costs were allocated on the basis of actual hours of usage. Show the total allocation of costs to each school. As the dean of the School of Business, would you prefer this method or the method in number 1? Explain.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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