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The cost allocation system at Exeter allocates all corporate costs to the divisions based on a variety of cost allocation bases. HR costs are allocated
The cost allocation system at Exeter allocates all corporate costs to the divisions based on a variety of cost allocation bases. HR costs are allocated based on the average number of employees in the two divisions. There are two basic activities in the HR Department. The first is employee maintenance payroll administration, benefits, and so on which is an ongoing activity and requires the same amount of work for each employee regardless of the employee's salary. The second, called turnover, handles new and departing employees, including all records and orientations for new employees and assurance of procedural integrity for all departures Virtually all of this activity occurs when employees are hired or leave the company. Assorted data for Exeter for the most recent year follow: The HR Department incurred the following costs during the same year. Required: a Under the current allocation system, what are the costs that will be allocated from HR to Retail Division? To Online Division? b Suppose the company implements an activitybased cost system for HR with the two activities, employee maintenance and turnover. Use the average number of employees as the cost driver for employee maintenance costs and the average number of employees hired or leaving for turnover costs. What are the costs that will be allocated from HR to Retail? To Online? Complete this question by entering your answers in the tabs below. Under the current allocation system, what are the costs that will be allocated from HR to Retail Division? To Online Division? Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.
The cost allocation system at Exeter allocates all corporate costs to the divisions based on a variety of cost allocation bases. HR costs
are allocated based on the average number of employees in the two divisions.
There are two basic activities in the HR Department. The first is employee maintenance payroll administration, benefits, and so on
which is an ongoing activity and requires the same amount of work for each employee regardless of the employee's salary. The
second, called turnover, handles new and departing employees, including all records and orientations for new employees and
assurance of procedural integrity for all departures Virtually all of this activity occurs when employees are hired or leave the
company.
Assorted data for Exeter for the most recent year follow:
The HR Department incurred the following costs during the same year.
Required:
a Under the current allocation system, what are the costs that will be allocated from HR to Retail Division? To Online Division?
b Suppose the company implements an activitybased cost system for HR with the two activities, employee maintenance and
turnover. Use the average number of employees as the cost driver for employee maintenance costs and the average number of
employees hired or leaving for turnover costs. What are the costs that will be allocated from HR to Retail? To Online?
Complete this question by entering your answers in the tabs below.
Under the current allocation system, what are the costs that will be allocated from HR to Retail Division? To Online Division?
Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.
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