10 5 Doints Slipped John's Custom Computer Shop (CCS) 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 Biling 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 biling, 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 took 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 tuises Total Number of be prepared 550 300 350 umber of disputes 60 10 70 Book References The Accounts Receivable Department incurred the following costs during the year. Dispute resolution Total 50750 35.000 301.750 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 10 Billing Dispute resolution Total 346,750 35,000 $31.750 5 point Succed 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 biling costs and the number of disputes for dispute resolution costs ebook Complete this question by entering your answers in the tabs below. Required Requiredo Under the current allocation system, what is the cost that will be allocated from Accounts Receivable to personal? To Business? (Do not round Intermediate calculation) Personal Business Allocated costs Required 10 Balling Dispute resolution Cotal 546,750 35.000 $8,750 5 points skipped 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, biling and dispute resolution. What is the cost that will be allocated from Accounts Receivable to Personal? To Business? Use the number of bulls prepared as the cost delver for billing costs and the number of disputes for dispute resolution costs. Bow References Complete this question by entering your answers in the tabs below. Required Required Suppose the company implements an activity-based cost system for Acco 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 Personal Business Bling Dispute resolution (Required A