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Pearson says I got the non highlighted boxes wrong, but I'm pretty sure its right Score: 0.97 of 5 pts P14-35 (similar to) Fredette Bakery
Pearson says I got the non highlighted boxes wrong, but I'm pretty sure its right
Score: 0.97 of 5 pts P14-35 (similar to) Fredette Bakery makes baked goods for grocery stores, and has three divisions: bread, cake and doughnuts. Each civision is run and evaluated separately, but the main headquarters incurs costs that are indirect costs for the divisions. (Click to view information for each division and the main headquarters) Read the recurements Requirement 1. Allocate the indirect costs of Fredette to each division equaly. Calculate civision operating income after allocation of headquarter costs. (Enter operating losses with minus signs or parentheses.) Bread Cake Doughnuts Segment margin $ 6.400,000 $ 1,000,000 $ 8,100 000 1.650.000 Allocated headquarter costs 1,650,000 1,650,000 4,750,000 $ 1650,000) S 4,450,000 Operating Income foss) Requirement 2. Allocale headquarter costs to the individual divisions using the proposed allocation beses Calculate the division operating income after allocation (Round a location proportions to three decimal places. Enter operating losses with minus signs or parentheses. Bread Cake Doughnuts Segment margin 6.400,000 S 1,000,000 $ 6,100,000 Data Table Alocated headquarter o Human resources 1,020 000 170,000 510,000 Accounting department 728684.21 157368.42 448157.89 Costs incurred in the main headquarters are as follows Rent and depreciation 864,000 144,000 432,000 Human resources (HR) costs $ 1.700.000 Other 170,000 170,000 170,000 Accounting department costs 1.300.000 3617315.79 Operating Income foss) 358631.56 4539642.11 Rent and depreciation 1.440,000 Other 510,000 5 $ 4.950.000 Total costs The Fredette upper management currently allocates this cost to the divisions equally. One of the division managers has done some research on Activity-based costing and proposes the use of different allocation bases for the different indirect costs - number of employees for HR costs, total revenues for accounting department costs, square feet of space for rent and depreciation costs, and equal alocation among the divisions of other costs Information about the three divisions folows: Total revenues Bread Cake Doughnuts $ 21,300,000 $ 4,800,000 $ 13,100,000 14,900,000 3,800,000 7.000.000 6.400,000 S 1,000,000 $ 6,100,000 Direct costs Segment margin Number of employees Square feet of space 600 300 18.000 100 3,000 9,000 Print DoneStep by Step Solution
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