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 Minutes (Thousands) 240 Calls (Thousands) 180 480 960 432 North America 720 1,044 During this period, the cost of the call center amounted to $2,520,000 for personnel and $1,950,000 for equipment and 144

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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
960
432
North America
720
1,044
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:
Division
Asia-Pacific
Minutes
(Thousands)
240
a-1. 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
480
Central and South America
Europe
North America
Asia-Pacific
Calls
(Thousands)
180
144
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).
Note: Do not round intermediate calculations. Enter your answers in dollars, not in thousands.
Central and South America
Europe
North America
Allocated Cost
Allocated Cost
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 960 432 North America 720 1,044 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: Division Asia-Pacific Minutes (Thousands) 240 a-1. 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 480 Central and South America Europe North America Asia-Pacific Calls (Thousands) 180 144 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). Note: Do not round intermediate calculations. Enter your answers in dollars, not in thousands. Central and South America Europe North America Allocated Cost Allocated Cost
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