Part 1

Part 2

Coastal Computer operates two retail outlets in Oakview, one on Main Street and the other in Lakeland Mall. The stores share the use of a central accounting department. The cost of the accounting department for last year was $171,000. Following are the operating results for the two stores for the year. Sales revenue Number of computers sold Main Street $ 2,181,820 1,760 Lakeland Mall $ 2,892,180 1,440 Required: a. Allocate the cost of the central accounting department to the two stores based on: 1. Number of computers sold. 2. Store revenue. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Number of computers sold. (Do not round intermediate calculations.) Main Street Lakeland Mall Total Allocated accounting department cost Req A1 Req A2 > Greenfield Consultants conducts analyses of public policy issues. The company has two units: Government (with various U.S. government agencies as the only clients) and Corporate (with several corporations as clients). Government business is charged based on the total costs (direct and indirect) plus a 15 percent fee (profit). Corporate clients are charged a fixed fee negotiated at the beginning of the project. During the planning process for the following year, the controller has estimated costs for the two units. Direct costs Direct contract hours worked Corporate Government Total $ 880,000 $3,520,000 $4,400,000 2,900 5,800 8,700 The controller expects indirect costs to total $10.2 million next year. Revenues from Corporate clients are expected to be $3.1 million. Required: a. Suppose Greenfield chooses to allocate indirect cost based on direct cost. 1. What cost would be allocated to the two units (Corporate and Government)? 2. What total revenue would they expect to collect next year? b. Suppose Greenfield chooses to allocate indirect cost based on direct contract hours worked. 1. What cost would be allocated to the two units (Corporate and Government)? 2. What total revenue would they expect to collect next year? Complete this question by entering your answers in the tabs below. Required A Required B 1. What cost would be allocated to the two units (Corporate and Government)? 2. What total revenue would they expect to collect next year? (Enter your answers in dollars and not in millions (i.e., 2.34 million should be entered as 2,340,000).) Corporate Government Total S % 1. Direct cost Percentage Allocation of indirect cost Percentage $ 0 % 0 0 % % $ 0 2. Direct cost Allocated indirect cost Total cost Fixed fee (Corporate) Fixed fee (Government) Total revenue 0 Required A Required B Corporate Government Total 0 % Direct contract hours Percentage Allocation of indirect cost Percentage 6 0 % 2. $ Direct cost Allocated indirect cost Total cost Fixed fee (Corporate) Fixed fee (Government) Total revenue