Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6) Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) an Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48 million. The following information is given: Governmental Services Commercial Support Utilization Revenues (5000) 42% $242,820 58 441,180
Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6) Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) an Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48 million. The following information is given: Governmental Services Commercial Support Utilization Revenues (5000) 42% $242,820 58 441,180
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
![Fixed
Variable
Total
$
Governmental
Services
0 $
Commercial
Support
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33e5edcd-a936-40c6-9e7c-c400b76433ab%2Fe7461c4f-848d-4b2f-a912-2a7943ba8bbe%2Fdyp5pik_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Fixed
Variable
Total
$
Governmental
Services
0 $
Commercial
Support
0
![Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6)
Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and
Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48
million. The following information is given:
Governmental Services
Commercial Support
Utilization
42%
58
Revenues (5000)
$ 242,820
441,180
Required:
What is the cost allocation if fixed IT costs of $37.4 million are allocated on the basis of utilization and the remaining costs (all variable)
are allocated on the basis of group revenues?
Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33e5edcd-a936-40c6-9e7c-c400b76433ab%2Fe7461c4f-848d-4b2f-a912-2a7943ba8bbe%2F4xp6lin_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6)
Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and
Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48
million. The following information is given:
Governmental Services
Commercial Support
Utilization
42%
58
Revenues (5000)
$ 242,820
441,180
Required:
What is the cost allocation if fixed IT costs of $37.4 million are allocated on the basis of utilization and the remaining costs (all variable)
are allocated on the basis of group revenues?
Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands.
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