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Support departments QualityControl5650.000 Training5600,000 Information system$500,000 Operating departments Consulting$1,000.000 Maintenances900,000 Quality Control costallocation basis. number of employees Information system cost allocation basis. 12 I0 1 number of computers Training costallocation basis.training hours 100 350 500

Question

Support departments QualityControl5650.000 Training5600,000 Information system500,000OperatingdepartmentsConsulting500,000 Operating departments Consulting1,000.000 Maintenances900,000 Quality Control costallocation basis. number of employees Information system cost allocation basis. 12 I0 1 number of computers Training costallocation basis.training hours 100 350 500

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Solution

To allocate the costs of the support departments to the operating departments, we use the provided cost allocation bases.

  1. Quality Control: The cost allocation basis is the number of employees. We don't have the number of employees for each department, so we can't allocate this cost.

  2. Training: The cost allocation basis is training hours. The total training hours are 100 (Consulting) + 350 (Maintenance) = 450 hours. Therefore, the cost allocated to Consulting is (600,000/450hours)100hours=600,000 / 450 hours) * 100 hours = 133,333.33 and to Maintenance is (600,000/450hours)350hours=600,000 / 450 hours) * 350 hours = 466,666.67.

  3. Information System: The cost allocation basis is the number of computers. We don't have the number of computers for each department, so we can't allocate this cost.

After allocating the Training costs, the total costs for each operating department are:

  • Consulting: 1,000,000(originalcost)+1,000,000 (original cost) + 133,333.33 (allocated Training cost) = $1,133,333.33
  • Maintenance: 900,000(originalcost)+900,000 (original cost) + 466,666.67 (allocated Training cost) = $1,366,666.67

Without the number of employees and computers for each department, we can't allocate the Quality Control and Information System costs.

This problem has been solved

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