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: $ 347,000 Computer services (85% fixed) Building occupancy Personnel costs 674,000 174,000 Total common costs $1,195,000 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) Payroll Computer time (hours) 26,900 53,800 $436,000 $236,000 280 300 4,400 $205,000 Computer storage (megabytes) -0- Equipment value Operating profit (pre-allocations) $255,000 $767,500 $707,500 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)? Multiple Choice $216,625. $187,736. $180,939 $179,483.

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: $ 347,000 Computer services (85% fixed) Building occupancy Personnel costs 674,000 174,000 Total common costs $1,195,000 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) Payroll Computer time (hours) 26,900 53,800 $436,000 $236,000 280 300 4,400 $205,000 Computer storage (megabytes) -0- Equipment value Operating profit (pre-allocations) $255,000 $767,500 $707,500 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)? Multiple Choice $216,625. $187,736. $180,939 $179,483.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...

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Question

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)
Building occupancy
347,000
674,000
Personnel costs
174,000
Total common costs
$1,195,000
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)
26,900
53,800
Рayroll
$436,000
$236,000
Computer time (hours)
Computer storage (megabytes)
280
300
4,400
-0-
Equipment value
Operating profit (pre-allocations)
$205,000
$255,000
$767,500
$707,500
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)?
Multiple Choice
$216,625.
$187,736.
$180,939.
$179,483.

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