Question
United Company blends and sells two products X&Y. each with different sales strategies, distribution channels, and product offerings. United is now considering the sale of
United Company blends and sells two products X&Y. each with different sales strategies, distribution channels, and product offerings. United is now considering the sale of a bundled product consisting of X&Y. For the most recent year, United reported retail price of X product $192, of Y product $448 and of (X+Y) $520. Using the incremental revenue-allocation method, with Y ranked as the primary product, the revenue allocated to Y product is:
a.
$364.
b.
$448.
c.
$192.
d.
$192.
National company has two support departments A&B and two operating departments X&Y. for the first quarter 2021, Budgeted overhead costs before any interdepartmental costs allocations were: A $800,000, B $1,500,000, X $5,000,000 and Y $11,000,000. Support work supplied by A to B 20%, to X 50% and to Y 30%. Support work supplied by B to A 25%, to X 35% and to Y 40%. Using step-down method and allocating department B cost first, out of its cost, the amount allocated to department B is:
a.
$0
b.
$525,000
c.
$600,000
d.
$375,000
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