Manning Systems is a commercial software vendor that sells billing and other financial software to companies around the glob Manning operates a centralized call center for customer support calls. Costs associated with use of the center are charged to the division with primary responsibility for the client. There are four geographical divisions: North America (NA), Central and South America (SA), Europe, and Asia-Pacific (APAC). The allocation is based on the length of time of calls made (Minutes). Idle time of the reservation agents and the fixed cost of the equipment are allocated based on the number of calls received (Calls) from clients in each division. Due to recent increased competition in the commercial software business, Manning has decided that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent period for which data are available, the use of the call center for each division was as follows: Division Asia-Pacific Central and South America Europe North America Minutes (Thousands) 270 598 990 750 Calls (Thousands) 210 174 462 1,074 During this period, the cost of the call center amounted to $2,520,000 for personnel and $1,950,000 for equipment and other costs. Required: a-1. Determine the allocation to each of the divisions using a single rate based on time used (minutes). a-2. Determine the allocation to each of the divisions using the dual rates based on time used (for personnel costs) and numbe of calls (for equipment and other costs).
Manning Systems is a commercial software vendor that sells billing and other financial software to companies around the glob Manning operates a centralized call center for customer support calls. Costs associated with use of the center are charged to the division with primary responsibility for the client. There are four geographical divisions: North America (NA), Central and South America (SA), Europe, and Asia-Pacific (APAC). The allocation is based on the length of time of calls made (Minutes). Idle time of the reservation agents and the fixed cost of the equipment are allocated based on the number of calls received (Calls) from clients in each division. Due to recent increased competition in the commercial software business, Manning has decided that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent period for which data are available, the use of the call center for each division was as follows: Division Asia-Pacific Central and South America Europe North America Minutes (Thousands) 270 598 990 750 Calls (Thousands) 210 174 462 1,074 During this period, the cost of the call center amounted to $2,520,000 for personnel and $1,950,000 for equipment and other costs. Required: a-1. Determine the allocation to each of the divisions using a single rate based on time used (minutes). a-2. Determine the allocation to each of the divisions using the dual rates based on time used (for personnel costs) and numbe of calls (for equipment and other costs).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req A1
Reg A2
Determine the allocation to each of the divisions using a single rate based on time used (minutes).
Note: Do not round intermediate calculations. Enter your answers in dollars, not in thousands.
Division
Asia-Pacific
Central and South America
Europe
North America
Show Transcribed Text
Req A1
Reg A2
Allocated Cost
Division
$
Asia-Pacific
Central and South America
Europe
North America
359,100
297,540
790,020
1,836,540
Complete this question by entering your answers in the tabs below.
< Req A1
Req A2 >
Determine the allocation to each of the divisions using the dual rates based on time used (for personnel costs) and number of
calls (for equipment and other costs).
Note: Do not round intermediate calculations. Enter your answers in dollars, not in thousands.
Allocated Cost
Ć
< Req A1
Req A2 >
Transcribed Image Text:Manning Systems is a commercial software vendor that sells billing and other financial software to companies around the globe.
Manning operates a centralized call center for customer support calls. Costs associated with use of the center are charged to
the division with primary responsibility for the client. There are four geographical divisions: North America (NA), Central and
South America (SA), Europe, and Asia-Pacific (APAC). The allocation is based on the length of time of calls made (Minutes). Idle
time of the reservation agents and the fixed cost of the equipment are allocated based on the number of calls received (Calls)
from clients in each division. Due to recent increased competition in the commercial software business, Manning has decided
that it is necessary to better allocate its costs in order to price its services competitively and profitably. During the most recent
period for which data are available, the use of the call center for each division was as follows:
Division
Asia-Pacific
Central and South America
Europe
North America
Minutes
(Thousands)
270
598
990
750
Calls
(Thousands)
210
174
462
1,074
During this period, the cost of the call center amounted to $2,520,000 for personnel and $1,950,000 for equipment and other
costs.
Required:
a-1. Determine the allocation to each of the divisions using a single rate based on time used (minutes).
a-2. Determine the allocation to each of the divisions using the dual rates based on time used (for personnel costs) and number
of calls (for equipment and other costs).
Complete this question by entering your answers in the tabs below.
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