iam has been compiling year-end financial data for the painting business where he works. The company specializes in the painting of both residential and commercial properties. William would like to determine what division is more profitable for the company so that the company can shift costs appropriately. William used activity-based costing based on support costs to allocate the Manufacturing Overhead (MOH) costs. He performed calculations and allocations and determined the following division information Sales Direct Cost of Services Facility Costs Management Support Administrative Support Misc. Expenses Residential $175500 $70500 $10500 $30150 $22500 $7000 Commercial $257500 $126500 $22500 $49500 $32900 $7750 Based upon the information provided by William, use vertical analysis to determine which division is using support costs more effectively as a percentage of sales O The residential division, as it is using 2.00% less support cost than the commercial division O The residential division, as it is using 0.85% more support cost than the commercial division O The residential division, as it is using 2.00% more support cost than the commercial division O The residential division, as it is using 0.85% less support cost than the commercial division

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William has been compiling year-end financial data for the painting business where he works. The company specializes in the painting
of both residential and commercial properties. William would like to determine what division is more profitable for the company so
that the company can shift costs appropriately. William used activity-based costing based on support costs to allocate the
Manufacturing Overhead (MOH) costs. He performed calculations and allocations and determined the following division information:
Sales
Direct Cost of Services
Facility Costs
Management Support
Administrative Support
Misc. Expenses
Residential
$175500
$70500
$10500
$30150
$22500
$7000
Commercial
$257500
$126500
$22500
$49500
$32900
$7750
Based upon the information provided by William, use vertical analysis to determine which division is using support costs more.
effectively as a percentage of sales
O The residential division, as it is using 2.00% less support cost than the commercial division
using 0.85% more support cost than the commercial division
O The residential division, as it is
O The residential division, as it is using 2.00% more support cost than the commercial division
O The residential division, as it is using 0.85% less support cost than the commercial division
Transcribed Image Text:William has been compiling year-end financial data for the painting business where he works. The company specializes in the painting of both residential and commercial properties. William would like to determine what division is more profitable for the company so that the company can shift costs appropriately. William used activity-based costing based on support costs to allocate the Manufacturing Overhead (MOH) costs. He performed calculations and allocations and determined the following division information: Sales Direct Cost of Services Facility Costs Management Support Administrative Support Misc. Expenses Residential $175500 $70500 $10500 $30150 $22500 $7000 Commercial $257500 $126500 $22500 $49500 $32900 $7750 Based upon the information provided by William, use vertical analysis to determine which division is using support costs more. effectively as a percentage of sales O The residential division, as it is using 2.00% less support cost than the commercial division using 0.85% more support cost than the commercial division O The residential division, as it is O The residential division, as it is using 2.00% more support cost than the commercial division O The residential division, as it is using 0.85% less support cost than the commercial division
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