Chomyn Corporation provides a variety of consulting services to a diverse range of clients. The company has three support departments and two operating departments, whose cost details for a typical quarter are presented below:

Support Departments:

Information Systems $268,000

Administration 347,000

Legal 192,000

Operating Departments:

Research Preparation

822,000

590,000

$2,219,000

The existing cost allocation system is designed as follows: (1) the support department costs are allocated to the two operating departments, and (2) the operating department costs are allocated to individual jobs. The support department costs are allocated to the operating departments as follows: (1) information systems department costs are allocated to research and preparation using a 60:40 ratio, (2) administration department costs are allocated using a 30:70 ratio, and (3) legal department costs are allocated using a 50:50 ratio. The costs accumulated in the two operating departments are allocated to individual jobs using research-hours and preparation-hours, respectively. The research and preparation departments recorded 9,000 and 7,500 hours, respectively, for the quarter.

Required:

Compute the predetermined cost allocation rates for the two operating departments.

Using the rates computed in part (1) above, assign the costs to jobs L123 & L342. The two

jobs consumed 340 & 480 research-hrs, respectively, and 600 & 750 preparation-hrs,

respectively.

You have recently learned about activity-based costing and decide to use five activity cost

pools, one for each department. The additional information you have collected is as follows:

Compute the predetermined allocation rate for each activity cost pool.

In addition to above, the two jobs consumed the following additional resources:

Assign the costs to the two jobs using activity-based costing.