Rice Company has a TV station and a radio station that share the common costs of the company’s news wire services, which are $200,000 a year. You have the following information about the wire services and the two stations:

Wire Service Hours Used This Hours of Station Period News Broadcasts Hoi oie Ce Ne is niin eM RM ER 300 100 FRG CllO mmeean ene anit en ee cat aeaaataa etary: 450 460 Required

a. What are the wire service costs charged to each station if wire service hours are used as an allocation base?

b. What are the wire service costs charged to each station using hours of news broadcast as an allocation base?

ce. Which method allocates more costs to TV? Which method allocates more costs to radio? When and why would this matter?