Summit Consulting Group has three departments: Audit (24 employees), Tax (18 employees), and Advisory (28 employees). The company's total office rent expense for the year was $420,000. If the rent is allocated based on number of employees, calculate how much rent expense should be allocated to each department.

Summit Consulting Group has three departments: Audit (24 employees), Tax (18 employees), and Advisory (28 employees). The company's total office rent expense for the year was $420,000. If the rent is allocated based on number of employees, calculate how much rent expense should be allocated to each department.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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[The following information applies to the questions displayed below.] BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to its employee. Gross Pay through August 31 Gross Pay for September a. $ 5,700 $ 1,800 b. 3,200 3,300 c. 132,600 9,200 Compute BMX’s amounts for each of these four taxes as applied to the employee’s gross earnings for September under each of three separate situations (a), (b), and (c). Note: Round your answers to 2 decimal places.