COST ACCOUNTING W/CONNECT
6th Edition
ISBN: 9781264022021
Author: LANEN
Publisher: MCG
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Chapter 12, Problem 36E
Alternative Allocation Bases: Service
Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,000,000 a year. You have the following information about the two divisions and the common communications network:
Required
- a. What is the communications network cost that is charged to each division if the number of calls is used as the allocation basis?
- b. What is the communications network cost to each division using time on network as the allocation basis?
- c. The cost of the communications network is necessary regardless of which division uses it. Why is the method of allocation important?
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Students have asked these similar questions
Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company's communications
network, which are $8,200,000 a year. You have the following information about the two divisions and the common communications
network.
Air express
Ground service
Required A
Calls
(thousands)
581,000
249,000
Required:
a. What is the communications network cost that is charged to each division of the number of calls is used as the allocation basis?
b. What is the communications network cost to each division using time on network as the allocation basis?
Complete this question by entering your answers in the tabs below.
Division
Air express
Ground service
Time on Network
(hours)
Required B
362,500
1,087,500
What is the communications network cost that is charged to each division if the number of calls is used as the allocation
basis? (Do not round intermediate calculations.)
Network Cost
2
Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company's communications
network, which are $8,500,000 a year. You have the following information about the two divisions and the common communications
network.
Air express
Ground service
Required:
a. What is the communications network cost that is charged to each division if the number of calls is used as the allocation basis?
b. What is the communications network cost to each division using time on network as the allocation basis?
Required A
Calls
(thousands)
581,000
249,000
Complete this question by entering your answers in the tabs below.
Division
Air express
Ground service
Time on Network
(hours)
340,000
1,020,000
Required B
What is the communications network cost that is charged to each division if the number of calls is used as the allocation
basis? (Do not round intermediate calculations.)
Network Cost
Required B
Barrington Box Enterprises has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,800,000. You have been provided with the
following information for the upcoming year:
Large
Small
Calls
150,000
90,000
The cost accountant determined $2,760,000 of the communication network's costs were fixed and should be allocated based on the number of calls. The remaining costs should be allocated based on the time on the
network. What is the total communication network costs allocated to the Large Box Division, assuming the company uses dual-rates to allocate common costs?
Multiple Choice
$2,760,000
$2,259,000
$2,541,000
Time on Network (hours)
160,000
240,000
$1,640,000
Chapter 12 Solutions
COST ACCOUNTING W/CONNECT
Ch. 12 - What does decentralization mean in the context of...Ch. 12 - Why is performance measurement an important...Ch. 12 - Prob. 3RQCh. 12 - What does dysfunctional decision making refer to?Ch. 12 - Prob. 5RQCh. 12 - What are the five basic kinds of decentralized...Ch. 12 - What is goal congruence? How is it different from...Ch. 12 - Prob. 8RQCh. 12 - What is relative performance evaluation?Ch. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - The management control system collects information...Ch. 12 - Salespeople are often paid a commission based on...Ch. 12 - Prob. 15CADQCh. 12 - Prob. 16CADQCh. 12 - On December 30, a manager determines that income...Ch. 12 - Prob. 18CADQCh. 12 - Prob. 19CADQCh. 12 - The manager of an operating department just...Ch. 12 - In the previous chapters, we considered different...Ch. 12 - A company has a bonus plan that states that...Ch. 12 - Prob. 23CADQCh. 12 - Prob. 24CADQCh. 12 - Prob. 25CADQCh. 12 - Prob. 26CADQCh. 12 - Prob. 27CADQCh. 12 - Prob. 28CADQCh. 12 - Prob. 29ECh. 12 - Evaluating Management Control SystemsEthical...Ch. 12 - Prob. 31ECh. 12 - Management Control Systems and Incentives A...Ch. 12 - Prob. 33ECh. 12 - Prob. 34ECh. 12 - Prob. 35ECh. 12 - Alternative Allocation Bases: Service Bartolo...Ch. 12 - Prob. 37ECh. 12 - Single versus Dual Rates: Ethical Considerations A...Ch. 12 - Single versus Dual Rates
Using the data for the...Ch. 12 - Alternative Allocation Bases Thompson Aeronautics...Ch. 12 - Tone at the Top, Ethics Once upon a time, a major...Ch. 12 - Prob. 42ECh. 12 - Prob. 43ECh. 12 - Internal Controls Commonly in many organizations,...Ch. 12 - Evaluating Management Control Systems SPG Company...Ch. 12 - Analyze Performance Report for Decentralized...Ch. 12 - Divisional Performance Measurement: Behavioral...Ch. 12 - Prob. 48PCh. 12 - Prob. 49PCh. 12 - Cost Allocations: Comparison of Dual and Single...Ch. 12 - Cost Allocation for Travel Reimbursement Your...Ch. 12 - Incentives, Illegal Activities, and Ethics An...
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