12 Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. More detailed financial information for HRS follows: 01:56:27 Clients Revenues Eastside 25,000 Staff hours $ 1,260,000 8,100 $ 462,000 eBook Staff costs General operating costs: User-related Staff-related Total general operating costs Westside 6,250 $840,000 2,700 $ 378,000 Total 31,250 $ 2,100,000 10,800 $840,000 $ 630,000 630,000 $ 1,260,000 The company plans to use Clients to allocate user-related costs and Staff Costs to allocate staff-related costs. Required: a. Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? 12 01:56:05 eBook Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. Note: Round your "User-related costs" answer to 2 decimal places. User-related costs Staff-related costs Predetermined Overhead Rate per user % Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. More detailed financial information for HRS follows: Clients Revenues Staff hours Staff costs General operating costs: User-related Staff-related Total general operating costs Westside 6,250 Eastside 25,000 $ 1,260,000 8,100 $ 840,000 2,700 $ 462,000 $ 378,000 Total 31,250 $ 2,100,000 10,800 $840,000 $630,000 630,000 $ 1,260,000 The company plans to use Clients to allocate user-related costs and Staff Costs to allocate staff-related costs. Required: a. Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? Complete this question by entering your answers in the tabs below. Required A Required B Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? Note: Negative amounts should be indicated by a minus sign. Eastside Westside Surplus

12 Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. More detailed financial information for HRS follows: 01:56:27 Clients Revenues Eastside 25,000 Staff hours $ 1,260,000 8,100 $ 462,000 eBook Staff costs General operating costs: User-related Staff-related Total general operating costs Westside 6,250 $840,000 2,700 $ 378,000 Total 31,250 $ 2,100,000 10,800 $840,000 $ 630,000 630,000 $ 1,260,000 The company plans to use Clients to allocate user-related costs and Staff Costs to allocate staff-related costs. Required: a. Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? 12 01:56:05 eBook Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. Note: Round your "User-related costs" answer to 2 decimal places. User-related costs Staff-related costs Predetermined Overhead Rate per user % Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. More detailed financial information for HRS follows: Clients Revenues Staff hours Staff costs General operating costs: User-related Staff-related Total general operating costs Westside 6,250 Eastside 25,000 $ 1,260,000 8,100 $ 840,000 2,700 $ 462,000 $ 378,000 Total 31,250 $ 2,100,000 10,800 $840,000 $630,000 630,000 $ 1,260,000 The company plans to use Clients to allocate user-related costs and Staff Costs to allocate staff-related costs. Required: a. Compute the predetermined overhead rate used to apply the two general operating costs pools to the two centers (Eastside and Westside) assuming HRS uses the proposed two-stage cost system to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? Complete this question by entering your answers in the tabs below. Required A Required B Based on the rates computed in requirement (a), what is the surplus (revenues minus costs) for each service? Note: Negative amounts should be indicated by a minus sign. Eastside Westside Surplus

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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