1) John's Custom Computer Shop (JCCS) assembles computers for both individual and corporate customers The company is organized into two divisions: Personal and Business. Once a computer is built, it is shipped to the customer. Billing for all customers is handled by the corporate Accounts Receivable Department Accounts Receivable performs two major activities: billing and dispute resolution Billing refers to preparing and sending the bills as well as processing the payments Dispute resolution occurs when a customer refuses to pay, usually due to an error in billing The costs of the Accounts Receivable Department are allocated to the two divisions based on the number of bills prepared. Kyle, the manager of the Business division, has complained that the allocated costs from Accounts Receivable are beginning to make the business division look unprofitable and has asked you to recommend some changes to the allocation system. If he agrees with your recommendation, he will pass them on to the chief financial officer Data on costs and activities in the Accounts Receivable Department follow Personal Business Total Number of ball RRERAR 650 300 950 Number of disputes 60 20 80 The Accounts Receivable Department incurred the following costs during the year Baina 642,750 Dispute resolution 44,000 Total $86,750 Required: a. Under the current allocation system, what is the cost that will be allocated from Accounts Receivable to Personal? To Business? b. Suppose the company implements an activity-based cost system for Accounts Receivable with two activities, billing and dispute resolution. What is the cost that will be allocated from Accounts Receivable to Personal? To Business? Use the number of bills prepared as the cost driver for billing costs and the number of disputes for dispute resolution costs 2) Exe Lawn & Plowing (ELSP) is a tan and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service Twenty employees worked a total of 35,000 hours last year, 23,000 on residential jobs and 12.000 on commercialjobs. Wages were $15 per hour for all work done. Any materials used are included in overhead as supplies All Overhead is allocated on the basis tabor hours worked, which is also the basis for customer charges. Because of increased competition for commercial accounts ELSP can charge $36 per hour for residential work, but only $27 per hour for commercial work Required: a. If overhead for the year was 5124,060, what were the profits of the residential and commercial services using labor-hours as the allocation base? (Do not round intermediate calculations. Round final answers to the nearest whole dollar) t. Overhead consists of costs of traveling to the site, using equipment (including vehicle rental) and using supplies, which can be traced as follows C Diver ace Se Driver SAR GARSKABER Tung beta . $ 25, 860 16 45 Vana wa bouke 33.00 3,200 2,000 WASDA SHRER Area serviced in square yards: 78.300 160,000 80,000 Total had $124,060 Recalculate profits for commercial and residential services based on these activity bases. (Do not rund Intermediate calculations Kound final answers to the nearest whole dollar.)