Mastery Problem: Evaluating Decentralized Operations BOR CPAS, Inc. BOR CPAS, Inc. is a closely held corporation owned by three stockholders who used the initials of their last names to form the corporation's name: Cyrus Bailey, John Ogden, and perform audits of both public companies and privately owned companies, BOR'S CPAs also provide tax services to both individuals and businesses. The corporation is divided into two profit centers: the Audit Division and the Tax Division. Each division is composed of two cost centers. The Audit Division is composed of two cos Audits. The Tax Division is composed of two cost-center departments also: Individual Tax and Business Tax. $60 110 BOR, a decentralized organization, is interested in evaluating the performance of the two divisions. The stockholders are responsible for deciding on investment in the two division turns to you for assistance. Mr. Bailey is only interested in evaluating operations at the profit center (division) level, and not at the cost center (department) level. Mr. Bailey is considering temporarily using some of the staff from the Tax Division to assist the Audit Division during the upcoming busy audit season, and would like to evaluate have 800 hours of excess capacity. The unit for determining sales revenue in both divisions is the engagement", which means the total agreed-upon work for a given dient in either audit or tax for a given year. Th engagement, and $15,750 per tax engagement. The company has its own Payroll Office, which provides payroll services to both divisions and will allocate its total expenses to the two divisions as support department allocation The following chart shows some basic data for the company: Hourly market rate for staff (the price the company would have to pay from an outside contractor for staff services) $100 Average hourly cost rate for staff (the average price the company pays to its staff) Number of paychecks issued by Audit Division Number of paychecks issued by Tax Division 340 Total expense for Payroll Office $29,250 Amount of assets invested in Audit Division by BOR CPAS, Inc. $10,000,000 Amount of assets invested in Tax Division by BOR CPAS, Inc. $4,000,000 Payroll Mr. Bailey would like you to start by analyzing the Payroll Office expenses, and allocating the total expenses to each division. He has decided to use the number of payroll chec Fill in the following blanks, allocating the total expense for the Payroll Office to each of the two divisions. Payroll Charge Rates per payroll check Support Department Division Allocations