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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 Direct Costs Number of Employees Assets Employed $312,600 $154,840 197,080 3 116,680 383,120 5 304,960 541,040 10 748,120 $1,433,840 22 $1,324,600 Advertising Circulation 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: $Answer 0 Amount allocated to Circulation: $Answer 0 b. Using your answer to (a), what are the total costs of the revenue-generating departments after the allocations? Advertising total costs $Answer 539304.5 Circulation total costs $Answer 649120.7 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: $Answer 81496 Amount allocated to Circulation: $Answer 199923 d. Using your answer to (C), what are the total costs of the revenue-generating departments after the allocations? Advertising total costs $Answer 0 Circulation total costs $Answer 0 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: $Answer 0 Amount allocated to Circulation: $Answer 0 f. Using your answer to (e), what are the total costs of the revenue-generating departments after the allocations? Advertising total costs $Answer o Circulation total costs $Answer 0
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