Question
only corrrect answers and show the work please PROBLEM 6-9. Choice of Allocation Base, Problems with Cost Allocation [LO 1] Tilden Financial Services has two
only corrrect answers and show the work please
PROBLEM 6-9. Choice of Allocation Base, Problems with Cost Allocation [LO 1] Tilden Financial Services has two divisions, Financial Planning and Business Consulting. The firms accountants are in the process of selecting an allocation base to allocate centrally provided personnel costs to the divisions. Two allocation bases have been proposed: salary and headcount (number of employees). Personnel costs are expected to be $1,500,000.
The following data relate to the allocation: Financial Planning Business Consulting Salaries $15,000,000 $5,000,000 Headcount 200 50 Required
a. Prepare a schedule showing the allocations to the two divisions using each allocation base.
b. Referring to your answer to part a, explain why allocations are sometimes considered arbitrary
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started