Merton Electronics operates two retail outlets in Port Wren, one downtown and the other in Docklands. The stores share the use of a corporate staff responsible for functions such as personnel, IT, marketing, purchasing, and so on. The cost of the corporate activities for last year was $162,000. The following are the operating results for the two stores for the year: Downtown Docklands Sales revenue $ 720,000 $ 900,000 Number of employees 45 30 Required: Allocate the cost of the corporate activities to the two stores based on: Number of employees. store revenue.

Merton Electronics operates two retail outlets in Port Wren, one downtown and the other in Docklands. The stores share the use of a corporate staff responsible for functions such as personnel, IT, marketing, purchasing, and so on. The cost of the corporate activities for last year was $162,000. The following are the operating results for the two stores for the year: Downtown Docklands Sales revenue $ 720,000 $ 900,000 Number of employees 45 30 Required: Allocate the cost of the corporate activities to the two stores based on: Number of employees. store revenue.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 7MC: Management accounting: emphasizes special-purpose information relates to the company as a whole is...

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	Downtown	Docklands
Sales revenue	$ 720,000	$ 900,000
Number of employees	45	30

Required:

Allocate the cost of the corporate activities to the two stores based on:
1. Number of employees.
2. store revenue.

Req A1
Reg A2
Number of employees.
Allocated accounting corporate costs
Downtown
Req A1
Docklands
$
Total
Req A2 >

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Req A1
Store revenue.
Reg A2
Allocated accounting corporate costs
Downtown
< Req
Docklands
$
Total
Req A2 >
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