Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6) Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48 million. The following information is given: Governmental Services Commercial Support Fixed Variable Total Required: What is the cost allocation if fixed IT costs of $37.4 million are allocated on the basis of utilization and the remaining costs (all variable) are allocated on the basis of group revenues? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Governmental Services $ Utilization 428 58 0 $ Revenues ($000) $ 242,820 441,180 Commercial Support

Exercise 12-40 (Algo) Single versus Dual Rates (LO 12-5, 6) Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $48 million. The following information is given: Governmental Services Commercial Support Fixed Variable Total Required: What is the cost allocation if fixed IT costs of $37.4 million are allocated on the basis of utilization and the remaining costs (all variable) are allocated on the basis of group revenues? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Governmental Services $ Utilization 428 58 0 $ Revenues ($000) $ 242,820 441,180 Commercial Support

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3EB: Identify the type of responsibility center (revenue center, cost center, profit center, or...

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Kentfield Advisory Services (KAS) is a large management consulting firm organized into two groups: Governmental Services (GS) and Commercial Support (CS). Corporate information technology (IT) services support both groups. The cost of computer support is $47 million. The following information is given: Governmental Services Commercial Support Utilization Revenues ($000) $ 241,400 438,600 Required A Required: a. What is the cost charged to each group if the allocation is based on the utilization? b. What is the cost charged to each group if revenue is the allocation basis? c. Most of the business in Commercial Support is priced on a fixed fee basis, and most of the work in the Governmental Services Department is priced on a cost-plus fixed fee basis. Will the allocation base selected affect the amount of revenue? Complete this question by entering your answers in the tabs below. Required B Required C 43% Governmental services Commercial Support 57 What is the cost charged to each group…
Identify the type of responsibility center (revenue center, cost center, profit center, or investment center) for each of the following situations. A. the legal department for Avon Manufacturing B. the Macys store in Mansfield, Ohio C. the food and beverage division of the Best Western D. the marketing department of the Hershey Company E. the Walmart #5030 on Central Avenue in Toledo, Ohio F. Apples Braeburn Capital Inc., where most of Apples billions of dollars are invested G. Zappos department store H. the mens clothing department in the Walmart #5030 in Toledo, Ohio
A consulting company has two departments, Corporate and Government. Conputer support is common to both departments. The cost of computer support is $9 million. Gigabytes Storage # of Consultants corporate 97,500 135 Government 52,500 165 Most of the business in the Corporate Department is priced on a fixed fee basis, while most of the Government Department is priced on a cost-plus fixed fee basis.Will this affect the choice of the allocation base?Should it?
Required information [The following information applies to the questions displayed below.] Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $510,000. Data for the fiscal year just ended show the following: Number of employees Number of new hires. Number of employees departing Allocation based on…
Outsourcing Call Centers; Strategy; Ethics; Present-Value Analysis (Chapter 12) Merchants’Bank (MB) is a large regional bank operating in 634 locations in the southeastern United States.Until 2014, the bank operated a call center for customer inquiries out of a single location in Atlanta,Georgia. MB understood the importance of the call center for overall customer satisfaction andmade sure that the center was managed effectively. However, in early 2013, it became clear that thecost of running the center was increasing very rapidly, along with the firm’s growth, and that someissues were arising about the quality of the service. To improve the quality and dramatically reducethe cost of the service, MB moved its call center to Bangalore, India, to be run by an experiencedoutsourcing firm, Naftel, which offers similar services to other banks like MB.The Naftel contract was for 5 years, and in late 2017 it was time to consider whether to renewthe contract, change to another call center…
! Required information [The following information applies to the questions displayed below.] Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $440,000. Data for the fiscal year just ended show the following: Number of employees Number of new hires Number of employees departing a. Using current…
Exercise 9-31 and 9-32 (Static) [The following information applies to the questions displayed below.] Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $350,000. Data for the fiscal year just ended show the following: Detroit Los Angeles Number of employees 380 120 Number of new hires 7 20…
! Required Information [The following Information applies to the questions displayed below.] Cranshaw Business Services (CBS) operates an Information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are centralized at the main office and the costs of these services are allocated to the two offices for the purposes of profitability assessment. The Detroit office is the original unit of the company and is well established, having long-time clients from the automotive and other manufacturing Industries. The Los Angeles office is new with a smaller, much more varied, clientele. The costs of personnel services at CBS are currently allocated on the basis of the number of employees in each office. The annual costs of the personnel department total $350,000. Data for the fiscal year just ended show the following: Number of employees Number of new hires Number of employees departing Detroit 380 Los Angeles…
E22-11 UrLink Company is a newly formed company specializing in high-speed Internet Prepare and discuss a service for home and business. The owner, Lenny Kirkland, had divided the company Into two segments Home Internet Service and Business Internet Service. Each segment Is run by Its own supervisor, while basic selling and administrative services are shared by both segments. Lenny has asked you to help him create a performance reporting system that will allow him to measure cach segment's performance in terms of its profitability. To that end, the following information has been collected on the Home Internet Service segment for the first quarter of 2017, responsibility reporl. (L0 2, 3), P I 22 Budgetary Control and Responsibility Accounting Budget $25,000 Actual Service revenue Allocated portion of: Building depreciation Advertising Billing Property taxes Material and supplies Supervisory salaries Insurance $26,200 11,000 5,000 3,500 1,200 1,600 9,000 4,000 3,000 2,800 1,500 11,000…
E22-11 UrLink Company is a newly formed company specializing in high-speed Internet Prepare and discuss a service for home and business. The owner, Lenny Kirkland, had divided the company into responsibility report. two segments: Home Internet Service and Business Internet Service. Each segment is run by its own supervisor, while basic selling and administrative services are shared by both segments. Lenny has asked you to help him create a performance reporting system that will allow him to measure each segment's performance in terms of its profitability. To that end, the following information has been collected on the Home Internet Service segment for the first quarter of 2017. (LO 2, 3), AP 04 22 Budgetary Control and Responsibility Accounting Budget $25,000 Actual Service revenue Allocated portion of: Building depreciation Advertising Billing Property taxes Material and supplies Supervisory salaries Insurance Wages Gas and oil $26,200 11,000 5,000 3,500 1,200 1,600 9,000 4,000 3,000…
Consider the national nonprofit organization the American Red Cross. Assume you are the regional director of the organization, and you just received the quarterly financial reports. Even though the organization is a nonprofit, assume it is set up as a profit center because it is helpful for the financial reports to show both donations and expenses by each region/location. One particular report shows there is one location in your region that is extremely over budget on nearly every expense item. From a management perspective, can you think of a reason(s) when going over budget might actually be a good thing? As the regional manager, how might you respond to the overages to help the particular location in the future?
Required information. [The following information applies to the questions displayed below) The following information is provided for each Investment Center. Investment Center Cameras Phones Computers Income $ 4,500,000 1,500,000 800,000 Average Assets $ 20,000,000 12,500,000 10,000,000 Compute return on investment for each investment center. Which center performed the best based on return on investment? Complete this question by entering your answers in the tabs below. Return on Performance Investment Based on ROI Compute return on investment for each investment center. Note: Round your final answer to 1 decimal place. Investment Center Cameras Phones Computers Income $ 4,500,000 $ 1,500,000 800.000 Average Assets 20,000,000 12,500,000 Return on Investment % % 10,000,000 %