Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. T call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expect call center data for next month follow. Call center volume: Number of calls. Number of call minutes Call center costs: Call-related Call minute-related Total call center costs Tourist 29,000 126,000 Total $ 222,950 106,920 $ 329,870 Premier 16,500 198,000 The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and number of call minutes to allocate call minute-related costs. a. Call related-overhead rate b. Call minute-related overhead rate c. Call center costs allocated to Tourist d. Call center costs allocated to Premier Required: a. Compute the call-related overhead rate for next month. Note: Round your answer to 2 decimal places. b. Compute the call minute-related overhead rate for next month. Note: Round your answer to 2 decimal places. c. Compute the total call center costs allocated to the Tourist package. d. Compute the total call center costs allocated to the Premier package. per call per call minute
Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. T call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expect call center data for next month follow. Call center volume: Number of calls. Number of call minutes Call center costs: Call-related Call minute-related Total call center costs Tourist 29,000 126,000 Total $ 222,950 106,920 $ 329,870 Premier 16,500 198,000 The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and number of call minutes to allocate call minute-related costs. a. Call related-overhead rate b. Call minute-related overhead rate c. Call center costs allocated to Tourist d. Call center costs allocated to Premier Required: a. Compute the call-related overhead rate for next month. Note: Round your answer to 2 decimal places. b. Compute the call minute-related overhead rate for next month. Note: Round your answer to 2 decimal places. c. Compute the total call center costs allocated to the Tourist package. d. Compute the total call center costs allocated to the Premier package. per call per call minute
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Westover Travel offers travel packages using both air and ocean travel. Westover offers two packages, Tourist and Premier, that differ
in the accommodations, class of travel, and so on. Westover has a call center, which handles customer queries and complaints. The
call center tracks the number of calls and the number of call-minutes for customers by the package they have purchased. Expected
call center data for next month follow.
Call center volume:
Number of calls
Number of call minutes
Call center costs:
Call-related
Call minute-related
Total call center costs
Tourist
29,000
126,000
Required:
Total
$ 222,950
106,920
$ 329,870
The call center at Westover uses a two-stage cost allocation system: It uses the number of calls to allocate call-related costs and the
number of call minutes to allocate call minute-related costs.
Premier
16,500
198,000
a. Call related-overhead rate
b. Call minute-related overhead rate
c. Call center costs allocated to Tourist
d. Call center costs allocated to Premier
a. Compute the call-related overhead rate for next month.
Note: Round your answer to 2 decimal places.
b. Compute the call minute-related overhead rate for next month.
Note: Round your answer to 2 decimal places.
c. Compute the total call center costs allocated to the Tourist package.
d. Compute the total call center costs allocated to the Premier package.
per call
per call minute
Expert Solution
Step 1
Overhead costs are those that are not directly related to the production of goods or services, but are necessary for the operation of a business. Examples of overhead costs include rent, utilities, insurance, legal fees, office supplies, advertising, payroll, and accounting fees.
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