Exceptional Events provides event management services. The company has three employees, each assigned to specific customers. The company considers each employee's territory as a business segment. The following data relate to its three segments for the month of June: Sale revenue Variable costs Maribel Jessica Timothy $8,000 $10,600 $5,900 $7,200 $12,350 $11,500 The business segments had the following number of customers: Maribel, 24; Jessica, 30; and Timothy, 34. The total fixed costs for the month amount to $3,500. What is the operating income of Exceptional Events for the month of June? OA. $2,100 OB. $2,850 OC. $30,950 OD. $6,350
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- Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: IT IT tickets HR 1,575 Employees 16 0 Publishing 2,520 24 Binding 2,205 40 Department direct costs $ 156,000 $ 248,850 $ 433,000 $ 397,500 Required: Allocate the service department costs using the reciprocal method. (Matrix algebra is not required because there are only two service departments.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. From: Service department costs IT HR Total Cost Allocation To: HR Publishing Binding $ ° $ ° $ 0 $ 0
- The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Month Special Analyses CustomerAccounts PaychecksProcessed AccountingService Costs 1 1 190 1,100 $ 58,800 2 1 260 1,010 61,600 3 2 270 1,170 59,200 4 2 250 920 59,100 5 3 160 1,280 60,600 6 2 170 1,180 61,900 7 1 340 830 59,000 8 4 220 1,220 61,400 9 3 150 1,210 61,300 10 1 230 1,270 60,100 11 2 220 1,130 60,200 12 2 300 930 61,200 13 3 190 1,010 59,700 14 3 290 1,120 60,700 15 4 300 910 60,500 16 2 180 980 60,200 Totals 36 3,720 17,270 $ 965,500 In addition to the above information, you learn that the accounting department had the following total…The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Month Special Analyses CustomerAccounts PaychecksProcessed AccountingService Costs 1 2 325 1,029 $ 63,800 2 4 310 993 68,900 3 2 302 1,268 64,000 4 1 213 1,028 61,300 5 2 222 984 61,600 6 0 214 712 50,800 7 1 131 762 51,020 8 1 123 739 54,300 9 0 115 708 50,500 10 2 296 1,232 64,800 11 2 213 978 58,000 12 1 222 929 57,500 13 2 217 1,059 62,200 14 2 132 942 54,900 15 4 300 1,299 71,530 16 4 315 1,283 64,800 Totals 30 3,650 15,945 $ 959,950 In…Great Eastern Credit Union (GECU) has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded.
- a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the followiing level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing busines using the account analysis approach? -1000 paycheck processed -200 customer accounts maintained -3 special analysesLucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,600 and for Purchasing is $40,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Office Department Books Magazines Newspapers Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Totals Purchasing Department Books Magazines Newspapers Sales $ 210,700 86,000 133,300 $ 430,000 Totals Allocation Base Purchase Orders Allocation Base 1,620 1,080 900 3,600 Percent of Allocation Base Numerator Denominator % of Total Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Cost to be Allocated Allocated CostLucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $25,600 and for Purchasing is $40,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Office Department Books Magazines Newspapers Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Totals Purchasing Department Books Magazines Newspapers Sales $ 210,700 86,000 133,300 $ 430,000 Totals Allocation Base Purchase Orders Allocation Base 1,620 1,080 900 3,600 Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total 0 0 0 0 Percent of Allocation Base Numerator Denominator % of Total 0 0 0 0 Cost to be Allocated Allocated Cost
- The following cost data pertain to the operations of Montgomery Department Stores, Ic., for the month of July. Corporate legal office salaries Apparel Department cost of sales-Evendale store Corporate headquarters building lease Store manager's salary-Evendale Store Apparel Department sales commission-Evendale Store store utilities-Evendale Store Apparel Department manager's salary-Evendale store Central warehouse lease cost 2$ 62,600 2$ 98,700 67,800 $ 18,100 2$ 9,000 2$ 12,500 9,700 $ 17,200 2$ Janitorial costs-Evendale Store 12,000 The Evendale Store is just one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company's stores. Required: 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of the…The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease Cosmetics Department sales commissions-Northridge Store Corporate legal office salaries Store manager's salary-Northridge Store Heating-Northridge Store Cosmetics Department cost of sales-Northridge Store Central warehouse lease cost Store security-Northridge Store Cosmetics Department manager's salary-Northridge Store Multiple Choice O The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department? $84,360 O $41,960 O $37,700 86,000 $ 5,300 $32,400 57,300 $ 11,700 $ 14,400 $ 32,400 $ 13,900 $ 16,300 $ 4,260The following data were summarized from the accounting records for Jersey Coast Construction Company for the year ended June 30, 20Y8: Cost of goods sold: Service department charges: Commercial Division $331,840 Commercial Division $45,250 Residential Division 163,310 Residential Division 28,290 Administrative expenses: Net sales: Commercial Division $60,330 Commercial Division $502,790 Residential Division 58,320 Residential Division 291,620 Prepare divisional income statements for DeSalvo Construction Company. JERSEY COAST CONSTRUCTION COMPANY Divisional Income Statements For the Year Ended June 30, 20Y8 Commercial Division Residential Division $ $ $ $ $ $ $ $