John's Custom Computer Shop (JCCS) assembles computers for both individual and corporate customers. The company is organized into two divisions: Personal and Business. Once a computer is built, it is shipped to the customer. Billing for all customers is handled by the corporate Accounts Receivable Department. Accounts Receivable performs two major activities billing and dispute resolution. Billing refers to preparing and sending the bills as well as processing the payments. Dispute resolution occurs when a customer refuses to pay, usually due to an error in billing The costs of the Accounts Receivable Department are allocated to the two divisions based on the number of bills prepared. Kyle the manager of the business division, has complained that the allocated costs from Accounts Receivable are beginning to make the business division look unprofitable and has asked you to recommend some changes to the allocation system. If he agrees with your recommendation, he will pass them on to the chief financial officer Data on costs and activities in the Accounts Receivable Department follow Personal Business 650 65 Total 1,000 80 350 15 Number of bills prepared Number of disputes The Accounts Receivable department incurred the following costs during the year S 50,000 Biling Dispute resolution $ 90,000 Total Required: a. uinder the curent alocation system what is the cost that ilt te allocated from Accounts Recevable to Personai? To Business? (Do not round intermediate calculations.) Personal Business Allocated costs sthe s nat vill be allocate from ccounts Receivable to Persona? To Business? Use the number of b. Suppose the company implements an activity-based cost system for Accounts Receivable wit disute resoltuson. bills prepared as the cost driver for billing costs and the number of disputes for dispute resolution costs Business Billing Dispute resolution