Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cincinnati Million, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the
Cincinnati Million, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions using the direct method. During the past month, the following common costs were incurred: Computer services (85% fixed) Building occupancy Personnel costs $271.000 611,000 121.000 Total common costs $1,003,000 The following information is available concerning various activity measures and service usages by each of the divisions Area occupied/square feet) Payroll Computer time (hours) Computer storage (megabytes) Equipment value Division A Division B 21,100 42,200 $391000 $191,000 310 330 4,600 -O- $211,000 $261,000 $506,000 $566,000 Operating profit (pre-allocations) If all common costs are allocated using operating profit as the allocation basis, what is the total cost allocated to Division B? O $528,851 0 $570,785 O $473.431. O $1,107,222
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started