Algebraic methodProsperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans).Monthly direct costs and the interdepartmental support structure are shown below:Percentage of Service Used byDepartment Direct Costs Admin. Human Resources Accounting Checking Savings LoansAdministration$540,000401020302020Human resourcesAccountingCheckingSavingsLoans360,000300,000630,000337,500675,000Checking $SavingsLoansTotal1010$ 2,842,50010101010Compute the total cost for each revenue-generating area of the bank using the algbraic method.Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar.Note: Round your final answers below to the nearest 100; for example, round 8,668 to 8,700.0 x0 x0 x✓303040

Algbraic method :Under this method the cost of the support area that serves the largest number of…

Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown below: Percentage of Service Used by Department Direct Costs Admin. Human Resources Accounting Checking Savings Loans Administration $540,000 10 40 10 360,000 20 30 300,000 20 20 630,000 337,500 675,000 Human resources Accounting Checking Savings Loans Checking S Savings Loans Total 10 10 0 x 0 x 0x $ 2,842,500✔ 10 10 10 Compute the total cost for each revenue-generating area of the bank using the algbraic method. Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar. Note: Round your final answers below to the nearest 100; for example, round 8,668 to 8,700. 30 30 40

Prosperous Bank has three support areas (administration, human resources, and accounting) and three revenue-generating areas (checking accounts, savings accounts, and loans). Monthly direct costs and the interdepartmental support structure are shown below: Percentage of Service Used by Department Direct Costs Admin. Human Resources Accounting Checking Savings Loans Administration $540,000 10 40 10 360,000 20 30 300,000 20 20 630,000 337,500 675,000 Human resources Accounting Checking Savings Loans Checking S Savings Loans Total 10 10 0 x 0 x 0x $ 2,842,500✔ 10 10 10 Compute the total cost for each revenue-generating area of the bank using the algbraic method. Note: Do not round proportions in your calculations; round your final answer to the nearest whole dollar. Note: Round your final answers below to the nearest 100; for example, round 8,668 to 8,700. 30 30 40

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential $ 327,000 Support department allocations: Payroll Department Purchasing Department 175 32 2,300 Total Commercial $ 434,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the…
Rundle Corporation has three divisions, each operating as a responsibility center. To provide an incentive for divisional executive officers, the company gives divisional management a bonus equal to 19 percent of the excess of actual net income over budgeted net income. The following is Atlantic Division's current year's performance. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Current Year $4,070,000 2,460,000 1,610,000 820,000 $ 790,000 The president has just received next year's budget proposal from the vice president in charge of Atlantic Division. The proposal budgets a 6 percent increase in sales revenue with an extensive explanation about stiff market competition. The president is puzzled. Atlantic has enjoyed revenue growth of around 11 percent for each of the past five years. The president had consistently approved the division's budget proposals based on 6 percent growth in the past. This time, the president wants to show that he…
Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 15,700 calls and incurred costs of $329,700. If 3,150 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to which of the following: A. $329,700. B. $66,150. C. $21. D. $263,550. E. $0.
A partial responsibility accounting report for a cost center is below. The value of letter (c) would be: Over (Under) Budget Controllable Costs Budgeted Actual Direct materials.... $52,800 $ a Direct labor....... 24,000 26,000 Utilities 19,200 C Totals... $96,000 $96,600 A $19,000 B $19,400 C) $54,000 D) $2,000 E None of the above $(1,200) b (200) $ 600
Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Support Department $800,100 Purchasing Department 258,000 Other corporate administrative expenses 455,000 Total corporate expense $1,513,100 The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Support Department charges the divisions for services rendered, based on the number of computers in the department, and the Purchasing Department charges divisions for services, based on the number of purchase orders for each department. The usage of service by the two divisions is as follows: Tech Support Purchasing Consumer Division 390 computers 6,000 purchase orders Commercial Division 240 11,200 Total 630 computers 17,200 purchase orders The service department charges of the…
In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $51,792, and the Purchasing Department had expenses of $22,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $ 460,000 $ 609,000 $ 1,399,000 Number of employees: Weekly payroll (52 weeks per year) 170 65 70 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,100 1,500 1,400 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract…
In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $63,568, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 145 65 70 Monthly payroll 34 45 32 Number of purchase requisitions per year 1,800 1,300 1,200 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Government Residential Commercial Total Contract Number of payroll checks: Weekly payroll Monthly payroll Total…
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $77,376, and the Purchasing Department had expenses of $39,530 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $ 826,000 $ 1,095,000 $ 2,514,000 Number of employees: Weekly payroll (52 weeks per year) 220 60 65 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,800 2,000 1,900 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Akagera Finance Plc has two service departments, the Human Resources (HR) Department and the Computing Department. Akagera Finance Plc has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows: User of Service Provider of Service HR Computing HR 0 10% Computing 10% 0 Deposit 55% 50% Loan 35% 40% The budgeted costs in the two service departments for the year are as follows: HR $ 529,000 Computing 758,500 Required: Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments