Bloomberg Enterprises services and repairs TV sets and operates in three regions: Red, White, and Blue. Data for 2020 are as follows in thousands of pesos: Red White Blue Service revenue 4,800 11,200 7,600 Variable cost of service 2,440 4,400 3,400 Variable selling costs 340 660 280 Direct fixed costs: Service 620 1,620 880 Selling 280 800 560 Administrative 640 880 760 Common fixed costs were P900,000 for administration and P220,000 for selling. Required: Prepare a performance report by region, showing contribution margin and regional profit. Show common costs as lump-sum deductions in the total column. Question Why do we need to allocate costs in responsibility centers? What happens if the costs are not allocated?

Bloomberg Enterprises services and repairs TV sets and operates in three regions: Red, White, and Blue. Data for 2020 are as follows in thousands of pesos: Red White Blue Service revenue 4,800 11,200 7,600 Variable cost of service 2,440 4,400 3,400 Variable selling costs 340 660 280 Direct fixed costs: Service 620 1,620 880 Selling 280 800 560 Administrative 640 880 760 Common fixed costs were P900,000 for administration and P220,000 for selling. Required: Prepare a performance report by region, showing contribution margin and regional profit. Show common costs as lump-sum deductions in the total column. Question Why do we need to allocate costs in responsibility centers? What happens if the costs are not allocated?

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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