Reference no: EM132743725
Accounting Question - A boat builder has two main departments - Fishing Trawler Dept & Luxury Yacht Dept. The marketing & promo budget for June 2017 to May 2018 is being debated.
The cost pool is made up as follows:
1. AGENCY COMMISSIONS 10% OF SALES VALUE 1,750,000
2. PRINTED MEDIA COSTS $150,000 150,000
3. MULTI MEDIA ADS $350,000 350,000
4. BROCHURES AND USER HANDBOOKS $100,000 100,000
5. CORPORATE GIFTS $50,000 50,000
COST POOL $650,000 + AGENCY COST
*Show how this cost Pool will be allocated to each department?
Sales for each department are as follows:
1. TRAWLERS $2.5 M
2. LUXURY YATCH $15 M
$17.5 M
Required -
1. Prepare the activity based cost allocation schedule in good format.
2. Make reasonable assumptions as to the cost driver.
3. Show the schedule and related workings on this worksheet.
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