Homework Help is Here – Start Your Trial Now!
Business
Accounting
aldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel osts are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations Ollows: Personnel 10,800 Employees Hours 120 5,400 Department direct costs $ 300,000 $ 160,000 $ 1,200,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Total costs Avoidable fixed Personnel $155,000 205,000 $360,000 Legal Legal $ 47,000 125,000 $ 172,000 Eastern Eastern $ 930,000 342,000 $1,272,000 Western 40 1,800 $ 790,000 Western $566,000 216,000 $ 802,000

aldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel osts are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations Ollows: Personnel 10,800 Employees Hours 120 5,400 Department direct costs $ 300,000 $ 160,000 $ 1,200,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Total costs Avoidable fixed Personnel $155,000 205,000 $360,000 Legal Legal $ 47,000 125,000 $ 172,000 Eastern Eastern $ 930,000 342,000 $1,272,000 Western 40 1,800 $ 790,000 Western $566,000 216,000 $ 802,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%
Please Correct Answer With Explanation And Do not Give Solution in Image format
Required: a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount < Required A Required B >
Transcribed Image Text:Required: a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount < Required A Required B >
Problem 11-64 (Algo) Reciprocal Cost Allocation-Outsourcing a Service Department (LO 11-1, 2) Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Personnel 120 0 10,800 $ 300,000 5,400 $ 1,200,000. Baldwin Enterprises estimates that the cost structure in its operations is as follows: Legal $ 47,000 125,000 Eastern $ 930,000 342,000 $ 1,272,000 $ 172,000 $ 26,000 $ 210,000 Employees Hours Department direct costs Variable costs Fixed costs Total costs Avoidable fixed costs Personnel $155,000 205,000 $360,000 $ 56,000 Legal 40 0 $ 160,000 Eastern Western 40 1,800 $ 790,000 Western $ 566,000 236,000 $ 802,000 $ 210,000
Transcribed Image Text:Problem 11-64 (Algo) Reciprocal Cost Allocation-Outsourcing a Service Department (LO 11-1, 2) Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Personnel 120 0 10,800 $ 300,000 5,400 $ 1,200,000. Baldwin Enterprises estimates that the cost structure in its operations is as follows: Legal $ 47,000 125,000 Eastern $ 930,000 342,000 $ 1,272,000 $ 172,000 $ 26,000 $ 210,000 Employees Hours Department direct costs Variable costs Fixed costs Total costs Avoidable fixed costs Personnel $155,000 205,000 $360,000 $ 56,000 Legal 40 0 $ 160,000 Eastern Western 40 1,800 $ 790,000 Western $ 566,000 236,000 $ 802,000 $ 210,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost allocation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS