Single versus Dual Rates: A CPA firm has two departments, audit and tax, and word processing that is common to both departments. The cost of word processing is $200,000. The following information is given concerning the support staff and the two departments.

Required:

a. What is the support staff cost charged to each department if pages of word processing is the allocation basis?

b. What is the support staff cost charged to each department if departmental payroll is the allocation basis?

Transcribed Image Text:

Pages of Word Processing Used by Department Payroll of Department $200,000 Audit 2,000 Tax 6,000 150,000