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Thompson Aeronautics repairs aircraft engines. The company's Purchasing Department supports its two departments, Defense and Commercial. The Defense division has contracts with the Department of Defense and the Commercial division works primarily with domestic airlines and air freight companies. The cost of the Purchasing Department is $740 million annually Information on the activity of the Purchasing Department for the last year follows. Number of Dollar Amount of Purchase Orders Purchases Defense 9,200 $136,000,000 Commercial 36,800 204,000,000 Required: a. What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the number of purchase orders? b. What is the cost charged to each division of Thompson allocates Purchasing Department costs based on the dollar amount of the purchases? c. Contracts with the Defense Department are on a cost-plus foxed fee basis, meaning the price is based on the cost of repairing an engine, including any overhead assigned to the division Contracts with commercial airlines and air freight companies are almost all fixed price, meaning the price does not depend directly on the cost. Will this affect Thompson's choice of an allocation base? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the number of purchase orders? (Do not round Intermediate calculations. Enter your answers in dollars, not in millions.) Cost Allocation Defense Commercial BA Required B Thompson Aeronautics repairs aircraft engines. The company's Purchasing Department supports its two departments, Defense and Commercial. The Defense division has contracts with the Department of Defense and the Commercial division works primarily with domestic airlines and air freight companies. The cost of the Purchasing Department is $7.40 million annually. Information on the activity of the Purchasing Department for the last year follows. Defense Commercial Number of Purchase Orders 9,200 36.800 Dollar Amount of Purchases $136,000,000 204,000,000 Required: a. What is the cost charged to each division If Thompson allocates Purchasing Department costs based on the number of purchase orders? b. What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the dollar amount of the purchases? c. Contracts with the Defense Department are on a cost-plus fixed fee basis, meaning the price is based on the cost of repairing an engine, including any overhead assigned to the division. Contracts with commercial airlines and air freight companies are almost all fixed price, meaning the price does not depend directly on the cost. Will this affect Thompson's choice of an allocation base? Complete this question by entering your answers in the tabs below. Required A Required B Required What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the dar amount of the purchases? (Do not round intermediate calculations. Enter your answers in dollars, not in millions.) Cost Allocation Defense Commercial Thompson Aeronautics repairs alrcraft engines. The company's Purchasing Department supports its two departments, Defense and Commercial. The Defense division has contracts with the Department of Defense and the Commercial division works primarily with domestic airlines and alr freight companies. The cost of the Purchasing Department is $7.40 million annually Information on the activity of the Purchasing Department for the last year follows. Defense Comercial Number of Purchase Ordera 9,200 36,800 Dollar Amount of Purchases $136,000,000 204,000,000 orders? Required: a. What is the cost charged to each division If Thompson allocates Purchasing Department costs based on the number of purchase b. What is the cost charged to each division if Thompson allocates Purchasing Department costs based on the dollar amount of the purchases? c. Contracts with the Defense Department are on a cost-plus fixed fee basis, meaning the price is based on the cost of repairing an engine, including any overhead assigned to the division. Contracts with commercial airlines and air freight companies are almost all fixed price, meaning the price does not depend directly on the cost. Will this affect Thompson's choice of an allocation base? Complete this question by entering your answers in the tabs below. Required A Required B Required Contracts with the Defense Department are on a cost-plus fixed fee basis, meaning the price is based on the cost of repairing an engine, including any overhead assigned to the division. Contracts with commercial airlines and air freight companies are almost all fixed price, meaning the price does not depend directly on the cost. Will this affect Thompson's choice of an allocation base? Show less OIO Yes No