Solution-What is the computer cost allocated to division b

What is the computer cost allocated to division b

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Reference no: EM13934898

Cincinnati Million, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred:

Computer services (85% fixed) $261,000

Building occupancy 601,000

Personnel costs 111,000

Total common costs $973,000

The following information is available concerning various activity measures and service usages by each of the divisions:

Division A	Division B
Area occupied (square feet)	20,100	40,200
Payroll	$381,000	$181,000
Computer time (hours)	210	230
Computer storage (megabytes)	4,100	-0-
Equipment value	$201,000	$251,000
Operating profit (pre-allocations)	$556,000	$496,000

If common computer service costs are allocated using computer time as the allocation basis, what is the computer cost allocated to Division B?

$136,432.

$137,894.

$144,679.

$173,829.

Reference no: EM13934898

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What is the computer cost allocated to division b

Reference no: EM13934898

Reference no: EM13934898

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