Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller istrying to decide how to allocate the costs of the Admissions Department, the Registrar's Department, and the Computer ServicesDepartment. The comptroller has compiled the following data for the year just ended.DepartmentAdmissionsAnnual Cost$118,000RegistrarComputer Services197,000420,000Planned CoursesBudgetedEnrollmentBudgetedCredit HoursRequiringComputer Work12esDivisionLiberal ArtsSciencesBusiness Administration1,10085031,00028,75022,7502575025Required:1. Distribute the departmental costs to the college's three divisions based on the allocation base given.2. Choose the better allocation base for distributing the cost to the following departments:Complete this question by entering your answers in the tabs below.Required 1Required 21 of 7Next >Prev

Calculation of Allocation base Budgeted Enrolment Budget Credit Hours Planned Course…

Required: 1. Distribute the departmental costs to the college's three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments:

Required: 1. Distribute the departmental costs to the college's three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments:

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller is
trying to decide how to allocate the costs of the Admissions Department, the Registrar's Department, and the Computer Services
Department. The comptroller has compiled the following data for the year just ended.
Department
Admissions
Annual Cost
$118,000
Registrar
Computer Services
197,000
420,000
Planned Courses
Budgeted
Enrollment
Budgeted
Credit Hours
Requiring
Computer Work
12
es
Division
Liberal Arts
Sciences
Business Administration
1,100
850
31,000
28,750
22,750
25
750
25
Required:
1. Distribute the departmental costs to the college's three divisions based on the allocation base given.
2. Choose the better allocation base for distributing the cost to the following departments:
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
1 of 7
Next >
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