#10

Exeter Group is a large retail company that has brick-and-mortar outlets throughout the Southeost. They hove been in business for many years, but two years ago started an online soles channel to offset slowing in-store sales. The human resources (HR) department ot Exeter hondles tosks for the two divisions that moke up Exeter: Retoil and Online. Retoil Division manoges the compony's troditionsl business line. This business, although still profitoble, is currently not growing and may be shrinking slightly. Online Division, on the other hand, has experienced double-digit growth from the beginning. The cost allocation system at Exeter allocates all corporate costs to the divisions bosed on a variety of cost ollocation bases. HR costs are allocoted bosed on the average number of employees in the two divisions. There are two basic activities in the HR. Deportment. The first is employee maintenonce (payroll odministration, benefits, and so on). which is on ongoing octivity and requires the some amount of work for each employee regardless of the employee's solary. The second, called turnover, handles new and departing employees, including all records and orientations (for new employees) and ossurance of procedural integrity (for all deportures). Virtually oll of this activity occurs when employees are hired or leove the company. Assorted dato for Exeter for the most recent yeor follow: The HR Deportment incurred the following costs during the some yeor. Required: a. Under the current allocotion system, whot are the costs that will be allocoted from HR to Retail Division? To Online Division? b. Suppose the company implements an activity-bosed cost system for HR with the two activities, employee maintenance and turnover. Use the overoge number of employees as the cost driver for employee maintenonce costs and the average number of employees hired or leaving for turnover costs. What ore the costs that will be allocated from HR to Retail? To Online? Complete this question by entering your answers in the tabs below. Under the current allocation system, what are the costs that will be allocated from HR to Retail Division? To Online Division? Note: Do not round intermediate calculations and round your answers to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Suppose the company implements an activity-based cost system for HR. with the two activities, Fmployee maintenance and turnover. Use the average number of employees as the cost driver for employee maintenance cdsts and the average number of employees hired or leaving for turnover costs. What are the costs that will be allocated from HR to Retail? To Online