Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66569c1838049_08766569c17c5a79.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66569c18e8280_08866569c1886671.jpg)
Transcribed Image Text:
Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $440,000. Data for the fiscal year just ended show the following: Number of employees Number of new hires Number of employees departing Detroit Los Angeles 362 1381 7 19 11 Exercise 9-31 (Algo) Unitwide versus Department Allocation-Administrative (Service) Function (LO 9-2, 3) Required: a. Compute the cost allocated to each unit using the current allocation system. b. The manager of the Detroit office believes that Detroit gets little benefit from the personnel office other than the occasional hire and termination help. The manager asks the controller's office to estimate the amount of Personnel Department cost associated with routine personnel matters (benefits and so on) and those associated with hiring employees and assisting with departing employees (transitions). The controller responds that if they separated the overhead costs on this basis, the cost of the Personnel Department for routine matters is $236,000 and the cost of the Personnel Department for transitions (each hire and each departure counts as one transition) is $204,000. Recompute the costs allocated to each unit using the separate rates for routine and transitional matters. Total Allocated Cost Detroit Los Angeles a. Using current allocation system b. Using separate rates Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $440,000. Data for the fiscal year just ended show the following: Number of employees Number of new hires Number of employees departing Detroit Los Angeles 362 1381 7 19 11 Exercise 9-31 (Algo) Unitwide versus Department Allocation-Administrative (Service) Function (LO 9-2, 3) Required: a. Compute the cost allocated to each unit using the current allocation system. b. The manager of the Detroit office believes that Detroit gets little benefit from the personnel office other than the occasional hire and termination help. The manager asks the controller's office to estimate the amount of Personnel Department cost associated with routine personnel matters (benefits and so on) and those associated with hiring employees and assisting with departing employees (transitions). The controller responds that if they separated the overhead costs on this basis, the cost of the Personnel Department for routine matters is $236,000 and the cost of the Personnel Department for transitions (each hire and each departure counts as one transition) is $204,000. Recompute the costs allocated to each unit using the separate rates for routine and transitional matters. Total Allocated Cost Detroit Los Angeles a. Using current allocation system b. Using separate rates
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Develop a 2 2 2 QSPM for an organization of your choice (i.e., two strengths, two weaknesses, two opportunities, two threats, and two strategies). Follow all the QSPM guidelines presented in the...
-
Give three guides for the allocation of service department costs.
-
Sven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company...
-
GHI Inc. is planning to select between two investment opportunities. The companys cost of capital is 13% and tax rate is 32%. Other information related to both opportunities are as follows:...
-
For each of the following problems ... Enter the solutions as a number only. For example, if the solution is x=2, enter 2 as the answer. Flag question: Question 1 Question 12 pts Solve8x7=25 Flag...
-
Graham Potato Company has projected sales of $ 1 1 , 4 0 0 in September, $ 1 4 , 5 0 0 in October, $ 2 1 , 4 0 0 in November, and $ 1 7 , 4 0 0 in December. Of the company\'s sales, 3 0 percent are...
-
object to fall back down from max height. 2. A book falls straight down off a 3.2m shelf. How long it takes the book to reach the ground. 3. A rock is dropped straight down off a 7.5m building. How...
-
8) As shown in figure, a thin uniform rod AB of mass M-10 kg and length L-120 cm is hinged at end A to the flat floor. It initially stands vertically. If it is allowed to fall to the floor as shown...
-
Simplify these Boolean expressions as much as possible: a) ((A+D)'(C'+B')'+C)' b) A'B+CA'D+B'+D' c) (A+(AB)'+C(AB)')(A+BA'+B')
-
An electric field E=(2.30x105 N/C, right) causes the 2.0 g ball in (Figure 1) to hang at an angle. Figure V Part A What is 8? Express your answer in degrees. 0 E 163 25 nC +2.0 g
-
Week 1 2 3 4 5 6 LC% 30% 60% 70% 80% 90% 100% We have a new team with this learning curve and a labor cost of $ 1.3 per unit. If the capacity is 16,457 units per week, how much would be the labor...
-
Which and how many methods would you recommend using prior to committing to a 1m development project?
-
The hotel has a maximum of 800,000 available for capital investment Note: these figures are cash flows; depreciation is straight-line over 4 years. a) Calculate the payback period, accounting rate of...
-
The hotel can only fund one of these three projects Cash flows/year 0 1 2 31 41 Total 1 2 3 -6,000 -3,000 -3,000 500 1,700 0 600 1,850 0 3,500 500 0 3,500 650 4,800 2,100 1,700 1,800 Note: these...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App