Question
ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver Graphics Production $200,000 number of copies made
ABC Corporation has three support departments with the following costs and cost drivers:
| Support Department | Cost | Cost Driver |
| Graphics Production | $200,000 | number of copies made |
| Accounting | 500,000 | number of invoices processed |
| Personnel | 400,000 | number of employees |
ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:
| Micro | Macro | Super | |
| Revenues | $700,000 | $850,000 | $650,000 |
| Direct operating expenses | 50,000 | 70,000 | 100,000 |
| Number of copies made | 20,000 | 30,000 | 50,000 |
| Number of invoices processed | 700 | 800 | 500 |
| Number of employees | 130 | 145 | 125 |
The support department cost that will be allocated to the Super Division is
a.$125,000
b.$550,000
c.$100,000
d.$350,000
The operating income of the Micro Division after all support department allocations will be
a.$650,000
b.$345,000
c.$610,000
d.$305,000
The support department allocation rate for Graphics Production is
a.$2.00
b.$10.00
c.$6.66
d.$0.50
The support department allocation rate for the Personnel Department is
a.$2,758
b.$1,000
c.$3,200
d.$3,077
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Survey Of Accounting
Authors: Carl S. Warren
2nd Edition
0324183445, 978-0324183443
