Exercise 6-52 (Algo) Two-Stage Cost Allocation and Predetermined Rates (LO 6-1, 2, 3) Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. The call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expected call center data for next month follow. Call center volume: Number of calls. Number of call minutes Call center costs: Call-related Call minute-related Total call center costs Tourist 28,000 124,000 Total $ 222,200 111,300 $333,500 a. Call related-overhead rate b. Call minute-related overhead rate c. Call center costs allocated to Tourist d. Call center costs allocated to Premier Premier 16,000 194,000 The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and the number of call minutes to allocate call minute-related costs. Required: a. Compute the call-related overhead rate for next month. Note: Round your answer to 2 decimal places. b. Compute the call minute-related overhead rate for next month. Note: Round your answer to 2 decimal places. c. Compute the total call center costs allocated to the Tourist package. d. Compute the total call center costs allocated to the Premier package. per call. per call minute
Exercise 6-52 (Algo) Two-Stage Cost Allocation and Predetermined Rates (LO 6-1, 2, 3) Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. The call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expected call center data for next month follow. Call center volume: Number of calls. Number of call minutes Call center costs: Call-related Call minute-related Total call center costs Tourist 28,000 124,000 Total $ 222,200 111,300 $333,500 a. Call related-overhead rate b. Call minute-related overhead rate c. Call center costs allocated to Tourist d. Call center costs allocated to Premier Premier 16,000 194,000 The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and the number of call minutes to allocate call minute-related costs. Required: a. Compute the call-related overhead rate for next month. Note: Round your answer to 2 decimal places. b. Compute the call minute-related overhead rate for next month. Note: Round your answer to 2 decimal places. c. Compute the total call center costs allocated to the Tourist package. d. Compute the total call center costs allocated to the Premier package. per call. per call minute
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 6-52 (Algo) Two-Stage Cost Allocation and Predetermined Rates (LO 6-1, 2, 3)
Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ
in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. The
call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expected
call center data for next month follow.
Call center volume:
Number of calls
Number of call minutes
Call center costs:
Call-related
Call minute-related
Total call center costs
Tourist
28,000
124,000
Total
$ 222,200
111,300
$333,500
Premier
16,000
194,000
The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and the
number of call minutes to allocate call minute-related costs.
a. Call related-overhead rate
b. Call minute-related overhead rate
c. Call center costs allocated to Tourist
d. Call center costs allocated to Premier
Required:
a. Compute the call-related overhead rate for next month.
Note: Round your answer to 2 decimal places.
b. Compute the call minute-related overhead rate for next month.
Note: Round your answer to 2 decimal places.
c. Compute the total call center costs allocated to the Tourist package.
d. Compute the total call center costs allocated to the Premier package.
per call
per call minute
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