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accounting department is trying to determine the best method to allocate
$1,000,000 of common costs (secretarial staff, reception personnel, etc),
either by salary or number of employees. Information on the revenue
departments are as follows:
Department
Employees
Salaries
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.Ques tion :
(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 :