As the managing partner of Metlock Accounting Services (HAS). Adam is trying to compare the profitability results of the firm's threedifferent business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported by three supportdepartments: Billing, Human Resources, and IT. The cost drivers (or allocation bases) for each of the support departments, along witheach department's usage of those services and its own original costs, are as follows.Support DepartmentsOperating DivisionsBillingHRITAuditТахAdvisoryTotalsOriginal cost$67,000$110,000 $89,000 $506,000$815,000 $311,000$1,898,000Billing hours used2,0001,4006004,000Number of employees2211215335IT hours used1002002009006003002,300 Rank the three support departments based on the percentage of their service provided to other support departments, and thenallocate their costs using the step method. (Round intermediate calculations to 4 decimal places, eg. 15.2516 and final answers to 2decimal places, eg. 15.25.)TotalAuditTaxAdvisoryTotal

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Answered: As the managing partner of Metlock…

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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Waterfield Company is looking for a way to help its executive managers assess how its three divisions are meeting the company’s goals and objectives for the performance of its purchasing department. Which of the following metrics might be used for this purpose? a. customer satisfaction rating b. the material price variance c. the amount of time employees spend in training d. operating income
Consumer Focus is a marketing research firm that organizes focus groups for consumerproduct companies. A Consumer Focus Staff member attends each session to ensure that all the logistical aspects run smoothly”In light to the above statement, classify each of the following cost items as:a. Direct or Indirect (D or I) costs with respect to each individual focus group.b. Variable or Fixed (V or F) costs with respect to how the total costs of Consumer Focus change as the number of focus groups conducted changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the number of groups conducted.)You will have two answers (D or I; V or F) for each of the following items followed by a short interpretation note. Use the sample answer table and continue from Cost Item BCost ItemA. Payment to individual in each focus group to provide comments on new products.B. Annual subscription of Consumer Focus to Consumer Reports magazine.C.…
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