Ally Jones, manager of the Vodafone sales team, has the following budget for her department: Billings – long distance $350 000 Billings – tele card $70 000 Billings – toll free $260 000 Required: What type of responsibility centre best describes her department, and why

Ally Jones, manager of the Vodafone sales team, has the following budget for her department: Billings – long distance $350 000 Billings – tele card $70 000 Billings – toll free $260 000 Required: What type of responsibility centre best describes her department, and why

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 1CMA

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Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the other in Bernalillo, New Mexico. The owner of Biotechtron centralized the legal services function in the Yuma office and had both laboratories send any legal questions or issues to the Yuma office. The legal services support center has budgeted fixed costs of 160,000 per year and a budgeted variable rate of 65 per hour of professional time. The normal usage of the legal services center is 2,600 hours per year for the Yuma office and 1,400 hours per year for the Bernalillo office. This corresponds to the expected usage for the coming year. Required: 1. Determine the amount of legal services support center costs that should be assigned to each office. 2. Since the offices produce services, not tangible products, what purpose is served by allocating the budgeted costs? 3. Now, assume that during the year, the legal services center incurred actual fixed costs of 163,000 and actual variable costs of 272,400. It delivered 4,180 hours of professional time2,580 hours to Yuma and 1,600 hours to Bernalillo. Determine the amount of the legal services centers costs that should be allocated to each office. Explain the purposes of this allocation. 4. Did the costs allocated differ from the costs incurred by the legal services center? If so, why?
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Akagera Finance Plc has two service departments, the Human Resources (HR) Department and the Computing Department. Akagera Finance Plc has two other departments that directly service customers, the Deposit Department and the Loan Department. The usage of the two service departments’ output for the year is as follows: User of Service Provider of Service HR Computing HR 0 10% Computing 10% 0 Deposit 55% 50% Loan 35% 40% The budgeted costs in the two service departments for the year are as follows: HR $ 529,000 Computing 758,500 Required: Use the reciprocal-services method to allocate the budgeted costs of the HR and Computing departments to the Deposit and Loan departments
The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year. Available capacity 9,400,000 pages Budgeted usage: Software Development 2,460,000 pages Training 3,600,000 pages Management 2,940,000 pages Cost equation $307,000 + $0.06 per page If DCC uses a dual-rate for allocating its costs based on usage, how much cost will be allocated to the Management Department? Multiple Choice $247,887. $276,687. $256,878. $130,829.
Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is $250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
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Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller hascompiled the following data for the year just ended. Department Annual CostAdmissions ................................................................................................... $ 90,000Registrar ............................................................................................................ 150,000Computer Services ......................................................................................... 320,000 Division Budgeted Budgeted Planned Courses Enrollment Credit Hours Requiring Computer WorkLiberal Arts .............…