Required: 1. Distribute the departmental costs to the college's three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments:

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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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 has compiled the following data for the year just ended.
Department
Admissions
Annual Cost
$118,000
Registrar
Computer Services
197,000
420,000
Planned Courses
Budgeted
Enrollment
Budgeted
Credit Hours
Requiring
Computer Work
12
es
Division
Liberal Arts
Sciences
Business Administration
1,100
850
31,000
28,750
22,750
25
750
25
Required:
1. Distribute the departmental costs to the college's three divisions based on the allocation base given.
2. Choose the better allocation base for distributing the cost to the following departments:
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
1 of 7
Next >
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Transcribed Image Text: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 has compiled the following data for the year just ended. Department Admissions Annual Cost $118,000 Registrar Computer Services 197,000 420,000 Planned Courses Budgeted Enrollment Budgeted Credit Hours Requiring Computer Work 12 es Division Liberal Arts Sciences Business Administration 1,100 850 31,000 28,750 22,750 25 750 25 Required: 1. Distribute the departmental costs to the college's three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments: Complete this question by entering your answers in the tabs below. Required 1 Required 2 1 of 7 Next > Prev
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