Dill Shipyards operates a dry dock on the East Coast, where it builds and repairs ships. The company's Payroll Department supports its two divisions, Naval and Private. The Naval division has contracts with the Department of Defense and the Private division works primarily with commercial shippers, specializing in tankers. The annual cost of the Payroll Department is $8.3 million. Selected data for the two divisions for the most recent year follow: Naval Private What is the cost allocation if fixed payroll costs of $5.6 million are allocated on the basis of number of employees and the remaining costs (all variable) are allocated on the basis of total payroll? Note: Enter your answers in dollars, not in millions or thousands. Do not round intermediate calculations. Fixed Variable Total Number of Total Payroll Employees (5000) $ 526,400 413,600 10,080 13,920 $ Naval 0$ Private
Dill Shipyards operates a dry dock on the East Coast, where it builds and repairs ships. The company's Payroll Department supports its two divisions, Naval and Private. The Naval division has contracts with the Department of Defense and the Private division works primarily with commercial shippers, specializing in tankers. The annual cost of the Payroll Department is $8.3 million. Selected data for the two divisions for the most recent year follow: Naval Private What is the cost allocation if fixed payroll costs of $5.6 million are allocated on the basis of number of employees and the remaining costs (all variable) are allocated on the basis of total payroll? Note: Enter your answers in dollars, not in millions or thousands. Do not round intermediate calculations. Fixed Variable Total Number of Total Payroll Employees (5000) $ 526,400 413,600 10,080 13,920 $ Naval 0$ Private
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dill Shipyards operates a dry dock on the East Coast, where it builds and repairs ships. The company's Payroll Department supports its
two divisions, Naval and Private. The Naval division has contracts with the Department of Defense and the Private division works
primarily with commercial shippers, specializing in tankers. The annual cost of the Payroll Department is $8.3 million.
Selected data for the two divisions for the most recent year follow:
Fixed
Variable
Total
Number of
Employees
10,080
13,920
Naval
Private
Required:
What is the cost allocation if fixed payroll costs of $5.6 million are allocated on the basis of number of employees and the remaining
costs (all variable) are allocated on the basis of total payroll?
Note: Enter your answers in dollars, not in millions or thousands. Do not round intermediate calculations.
$
Naval
Total Payroll
(5000)
$ 526,400
413,600
0$
Private
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