Zeta Services

Scenario: Allocate Costs

Data:

• Cost Pools and Allocation Bases:
  • Cost Pool 1 (Admin Costs): $100,000, Allocation Base: Number of Employees
  • Cost Pool 2 (IT Costs): $150,000, Allocation Base: Number of Computers

Requirements:

1. Allocate admin costs based on the number of employees.
2. Allocate IT costs based on the number of computers.
3. Compare the allocation methods and their impact on departmental budgets.
4. Discuss the advantages and disadvantages of using different allocation bases for cost allocation.
5. Recommend a suitable cost allocation method for Zeta Services based on its cost structure.