Tenet Engineering, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred: Computer services (85% fixed) $ 260,000 Building occupancy 600,000 Personnel costs 110,000 Total common costs $ 970,000 The following information is available concerning various activity measures and service usages by each of the divisions: Division A Division B Area occupied (square feet) 20,000 40,000 Payroll $380,000 $180,000 Computer time (hours) 200 220 Computer storage (megabytes) 4,050 -0- Equipment value $200,000 $250,000 Operating profit (pre-allocations) $555,000 $495,000 If common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division B (rounded to the nearest whole dollar)?

Tenet Engineering, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred: Computer services (85% fixed) $ 260,000 Building occupancy 600,000 Personnel costs 110,000 Total common costs $ 970,000 The following information is available concerning various activity measures and service usages by each of the divisions: Division A Division B Area occupied (square feet) 20,000 40,000 Payroll $380,000 $180,000 Computer time (hours) 200 220 Computer storage (megabytes) 4,050 -0- Equipment value $200,000 $250,000 Operating profit (pre-allocations) $555,000 $495,000 If common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division B (rounded to the nearest whole dollar)?

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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