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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 departments
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 Administration Human resources Advertising Circulation Direct Costs Number of Employees Assets Employed $547,050 7 $270,970 344,890 6 204,190 670,460 8 533,680 946,820 18 1,309,210 $2,509,220 39 $2,318,050 Totals a. Using the direct method, allocate the support department costs to the revenue-generating departments. Note: Round percentages in your calculation to the nearest whole percent (for example, round 34.5% to 35%). Note: Round your final answer to the nearest whole dollar. Amount allocated to Advertising: $ Amount allocated to Circulation: $ b. Using your answer to (a), what are the total costs of the revenue-generating departments after the allocations? Advertising total costs $ Circulation total costs $ C. Assuming that the benefits-provided ranking is the order shown in the table, use the step method to allocate the support department costs to the revenue-generating departments. Note: Round your final answers only to the nearest whole dollar. Amount allocated to Advertising: $ Amount allocated to Circulation: $ d. Using your answer to (c), what are the total costs of the revenue-generating departments after the allocations? Advertising total costs $ Circulation total costs $ e. Using the algebraic method, allocate the support department costs to the revenue-generating departments. Note: Round percentages in your calculation to the nearest whole percent (for example, round 34.5% to 35%). Note: Round your final answer to the nearest whole dollar. Amount allocated to Advertising: $ Amount allocated to Circulation: $ total costs of the revenue-generating departments after the allocations? f. Using your answer to (e), what are Advertising total costs $ Circulation total costs $
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