Task: The Customer Service Department of Go Fast Inc. asked the Publications Department to prepare a brochure for its training program. The Publications Department delivered the brochures and charged the Customer Service Department a rate that was 25% higher than could be obtained from an outside printing company. The policy of the company required the Customer Service Department to use the internal publications group for brochures. The Publications Department claimed that it had a drop in demand for its services during the fiscal year, so it had to charge higher prices in order to recover its payroll and fixed costs. Recommend how the cost of the brochure should be transferred to the Customer Service Department.
Task: The Customer Service Department of Go Fast Inc. asked the Publications Department to prepare a brochure for its training program. The Publications Department delivered the brochures and charged the Customer Service Department a rate that was 25% higher than could be obtained from an outside printing company. The policy of the company required the Customer Service Department to use the internal publications group for brochures. The Publications Department claimed that it had a drop in demand for its services during the fiscal year, so it had to charge higher prices in order to recover its payroll and fixed costs. Recommend how the cost of the brochure should be transferred to the Customer Service Department.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Task:
The Customer Service Department of Go Fast Inc.
asked the Publications Department to prepare a
brochure for its training program. The
Publications Department delivered the brochures
and charged the Customer Service Department a
rate that was 25% higher than could be obtained
from an outside printing company. The policy of
the company required the Customer Service
Department to use the internal publications group
for brochures. The Publications Department
claimed that it had a drop in demand for its
services during the fiscal year, so it had to charge
higher prices in order to recover its payroll and
fixed costs.
Recommend how the cost of the brochure
should be transferred to the Customer Service
Department.
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