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The question is attached but I would like to know how Could you address the numbers in BOLD in the question below? Using the formula
The question is attached but I would like to know how
Could you address the numbers in BOLD in the question below? Using the formula givin, I get $266,000 not $267,606
Franklin Corporation has three operating departments (Fabricating, Assembly, and Finishing) and two service departments (Custodial and Administrative). The following information has been provided: | |||||
Custodial | Admin | Fabricating | Assembly | Finishing | |
Dept Costs | 250,000 | 400,000 | -- | -- | -- |
# employees | 10 | -- | 80 | 100 | 60 |
Sq ft | -- | 15,000 | 30,000 | 35,000 | 20,000 |
Allocations are based on the following: | |||||
Custodial: | Square feet | ||||
Administrative: | Number of employees | ||||
Required: | |||||
Franklin has been approached by Sparkle Cleaning to outsource the custodial service. Assuming all costs are variable, what is the relevant cost of the custodial department to compare with the Sparkle Cleaning bid? | |||||
Correct answers: | My answers | ||||
Custodial = $250,000 + (10/(10 + 80 + 100 + 60) Admin) | 266,000 | I do not get $267,606 | |||
Admin = $400,000 + (15,000/(15,000 + 30,000 + 35,000 + 20,000) Custodial) | |||||
Custodial = $267,606 | |||||
Admin: $400,000 + 40,141 = $440,141 [$400,000 + (.15 $267,606 = $40,141)] | 437,500 | I do not get $440,141 | |||
Custodial: $250,000 + 17,606 = $267,606 [ $250,000 + (.04 $440,141 = $17,606)] |
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