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?

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?

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Description: 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 Consultantscorporate97,500135Government52,500165Most of the busines

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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A consulting firm has two departments, Corporate and Government. Computer support is common to both departments. The cost of computer support is $9 million. The following information is given: Gigabytesof Storage Numberof Consultants Corporate 97,500 135 Government 52,500 165 Required: What is the cost allocation if fixed computer costs of $7 million are allocated on the basis of number of consultants and the remaining costs (all variable) are allocated on the basis of the number of gigabytes of storage used by the department? (Enter your answers in dollars, not in millions. Do not round intermediate calculations.)
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please dont provide answer in image format thank you Hunt Company and Indio Company are noncompeting lines of business and use a common database for marketing purposes. The variable costs associated with accessing the database are readily identifiable and kept in separate cost pools that are charged to each user. The fixed costs of maintaining the database, however, cannot be identified by user on a cause-and-effect basis. These fixed costs for the next year are budgeted at $55,000. If Indio does not use the database, the fixed costs to Hunt are $48,000. An outside vendor offers to provide Hunt access to a comparable database for a fixed fee of $60,000 per year plus variable costs of accessing the database. The same vendor offers to provide Indio access to that database for a fixed fee of $20,000 per year plus variable costs of accessing the database. Required: Compute how much of the $55,000 fixed costs of maintaining the database are charged to by each user: a. Under the…
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