Part A

Wollongong Credit Centre (WCC) provides loan to two types of clients; individuals and corporate client. WCC has two support departments: IT Support (IT) and Admin Support (Admin) department. In addition, WCC has two operation departments to deal with its two distinct clients named Individual clients and corporate clients department. For the next quarter, the following cost record including budgeted cost of support department to be allocated to operating department is as follows: (TABLE ATTACHED)

Required (show your workings): (a) Using the direct method, determine the amount of support department costs will be allocated to the two operation departments. (b) Using the step-down method, determine the amount of support department costs will be allocated to the two operation departments if the Admin department with the highest amount is allocated first. (c) Compare and explain differences.

Part B

Make-u-Up Ltd produces and sells women make-up and skin care products. The information about both products is as follows: (TABLE ATTACHED)

Quincy, the manager of Make-u-Up Ltd found that sales report shows in average the company sells 35 units of make-up and 65 units of skin care. The total fixed costs are $38 220.

Required (show your workings):

(a) Calculate the estimated break-even point in units and in sales dollars of make-up.

(b) Calculate the estimated break-even point in units and in sales dollars of skin care.

(c) What is the operating profit when total sales of both products 9 000 units.

Part A Wollongong Credit Centre (WCC) provides loan to two types of clients; individuals and corporate client. WCC has two support departments: IT Support (IT) and Admin Support (Admin) department. In addition, WCC has two operation departments to deal with its two distinct clients named Individual clients and corporate clients department. For the next quarter, the following cost record including budgeted cost of support department to be allocated to operating department is as follows: Operation Support Department Department | Admin Individual Corporate Total Budgeted costs $ 1,200,000 1,500,000 7,500,000 8,000,000 18,200,000 Support work supplied by IT 25% 35% 100% Support work supplied by Admin 10% 30% 60% 100% 40% 10 marks Required (show your workings): (a) Using the direct method, determine the amount of support department costs will be allocated to the two operation departments Using the step-down method, determine the amount of support department costs will be allocated to the two operation departments if the Admin department with the highest amount is allocated first. (c) Compare and explain differences in the support-department allocated to each operation department. 20 marks 20 marks Part B Make-u-Up Ltd produces and sells women make-up and skin care products. The information about both products is as follows: Make-up $65 $42 Skin care $85 Selling price Variable costs Quincy, the manager of Make-u-Up Ltd found that sales report shows in average the company sells 35 units of make-up and 65 units of skin care. The total fixed costs are $38 220. Required (show your working): (a) Calculate the estimated break-even point in units and in sales dollars of make-up. (b) Calculate the estimated break-even point in units and in sales dollars of skin care. | (c) | What is the operating profit when total sales of both products 9 000 units. (15 marks) (15 marks) (20 marks) |