A company has two major businesses that it operates one

Reference no: EM13604073

A company has two major businesses that it operates. One business manufactures and sells unicycles for commerial use in circuses and so forth, and the other sells bicycles to the public. The unicycle business occupies 75,000 square feet of the manufacturing warehouse, and the bicycle business occupies the remaining 25,000 square feet. Cost were split 50-50 between the 2 businesses for advertising ( total advertising expense of $5M) and warehouse expense (total warehouse expense of $3M) in the past (traditional method).
1. What was the cost of advertising and warehouse expense allocated to each of the businesses based on the traditional method?

2. What recommendations would you make in allocating these expenses to each of the businesses, and how much would be allocated to each business?

3. What would be some of the issues of too many expenses or too little expenses being allocated to each of the businesses?

Reference no: EM13604073

Questions Cloud

Ollie olive oil began business in 2010 during which it : ollie olive oil began business in 2010 during which it produced 104000 quarts of olive oil. in 2010 the company sold

Crescent lighting inc produces and sells lighting fixtures : crescent lighting inc. produces and sells lighting fixtures. an entry light has a total cost of 60 per unit of which 32

The cash account for online medical co at june 30 2012 : the cash account for online medical co. at june 30 2012 indicated a balance of 9375. the bank statement indicated a

A company has two major businesses that it operates one : a company has two major businesses that it operates. one business manufactures and sells unicycles for commerial use in

Ck is starting a business that he expects to produce 60000 : ck is starting a business that he expects to produce 60000 of income this year before compensating jack for his

The cost of the merchandise sold is 24500 abbey co issued a : abbey co. sold merchandise to gomez co. on account 35000 terms 215 net 45. the cost of the merchandise sold is 24500.

For the profitability analysis compute medical products a : income statement compared with industry averageyear ended december 31 20x5medical industryaveragenet

In october keane company reports 21000 actual direct labor : in october keane company reports 21000 actual direct labor hours and it incurs 115000 of manufacturing overhead costs.

User Account

All Pages