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Management at C. Pier Press has decided to allocate costs of the paper's two support departments (administration and human resources) to the two revenue-generating
Management at C. Pier Press has decided to allocate costs of the paper's two support departments (administration and human resources) to the two revenue-generating departments (advertising and circulation). Administration costs are to be allocated on the basis of dollars of assets employed; human resources costs are to be allocated on the basis of number of employees. The following costs and allocation bases are available: Department Direct Costs Number of Employees Assets Employed Administration $547,050 7 $270,970 Human resources 344,890 6 204,190 Advertising 670,460 8 533,680 Circulation 946,820 18 1,309,210 Totals $2,509,220 39 $2,318,050
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