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Suppose you are the manager of a widget-production company. The company's two support departments, Purchasing and Human Resources, are currently allocated amongst its three manufacturing departments: Laminating, Fabricating, and Assembling. Currently, the support department's costs are divided equally among the three manufacturing departments. The company has conducted an analysis using the number of employees in the manufacturing departments as the activity driver. The results of the analysis indicate Fabricating would receive 50% of the total costs of Purchasing and Human Resources, Laminating would receive 30%, and Assembling would receive 20%. As a manager, would you suggest the firm adopt the new activity-driven allocations or retain the current allocation method? Choose a method of allocation and provide your rationale. Identify at least two additional cost drivers that could be used to allocate the costs of the two support departments and explain the rationale you used to select the additional cost drivers. Must be original work, and no more than 250 words. Must have proper citation.
Motorcycle Manufacturers, Inc. projected sales of 76,000 machines for 2012. The estimated January 1, 2012, inventory is 6,500 units, and the desired December 31, 2012, inventory is 7,000 units.
On February 5, 2010, Tropical Connection Company, a garden retailer, purchased $25,000 of seed, terms 2/10, n/30, from Midwest Seed Co. Even though the discount period had expired, Lydia DeLay subtracted the discount of $500 when she processed the..
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Assume that the allowance for doubtful accounts for Wigs Plus has a credit balance of $1,710 before adjustment on December 31, 2009. Journalize the adjustment for uncollectible accounts.
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