ABC Corporation has three service departments with the following costs and activity base: Service Department Cost Activity Base for Allocation 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 is as follows: Micro Macro Super Direct 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 What is the service department charge rate for Graphics Production?
ABC Corporation has three service departments with the following costs and activity base: Service Department Cost Activity Base for Allocation 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 is as follows: Micro Macro Super Direct 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 What is the service department charge rate for Graphics Production?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Corporation has three service departments with the following costs and activity base:
| Service Department | Cost | Activity Base for Allocation |
| 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 is as follows:
| Micro | Macro | Super | |
| Direct 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 |
What is the service department charge rate for Graphics Production?
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