Galaxy Enterprises has two operating divisions - North Division and South Division. The company's IT Support Department provides services to both divisions. The variable costs of the IT Support Department are budgeted at $40 per support request. The IT Support Department's fixed costs are budgeted at $500,000 for the year. The fixed costs of the IT Support Department are determined based on the peak period support requests. Percentage of peak period capacity required . North Division: 40% South Division: 60% Budgeted support requests North Division: 3,000 South Division: 4,500 At the end of the year, actual IT Support Department variable costs totaled $370,000 and fixed costs totaled $510,000. The North Division had a total of 3,200 support requests, and the South Division had a total of 4,200 support requests for the year. Calculate the amount of the IT Support Department's costs that should be charged to each of the operating divisions at the end of the year.

Galaxy Enterprises has two operating divisions - North Division and South Division. The company's IT Support Department provides services to both divisions. The variable costs of the IT Support Department are budgeted at $40 per support request. The IT Support Department's fixed costs are budgeted at $500,000 for the year. The fixed costs of the IT Support Department are determined based on the peak period support requests. Percentage of peak period capacity required . North Division: 40% South Division: 60% Budgeted support requests North Division: 3,000 South Division: 4,500 At the end of the year, actual IT Support Department variable costs totaled $370,000 and fixed costs totaled $510,000. The North Division had a total of 3,200 support requests, and the South Division had a total of 4,200 support requests for the year. Calculate the amount of the IT Support Department's costs that should be charged to each of the operating divisions at the end of the year.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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