Financial Planning 150 employees $ 10,000,000 Business Consulting 50 employees $ 5,000,000
( a) Allocate the $ 1,000,000 common costs to the two revenue departments using both methods.( b) Why are allocations called arbitrary? Points Received: 25 of 25 3. Question:( TCO 10) Charlie Corp sells it products on both credit and cash basis. Monthly sales are sold 20 % for cash, 80 % for credit. Credit sales are collected 40 % in the month of sale and 60 % the following month. Sales for the first quarter are as follows:
January $ 100,000 February $ 150,000 March $ 125,000
Compute cash collections for February. Points Received: 25 of 25 4. Question:( TCO 2) Acme Fireworks uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $ 1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours worked were 195,000 and actual overhead was $ 978,000.
( a) Compute the predetermined manufacturing overhead rate.( b) Compute the applied manufacturing overhead.