Giardin Outdoors is a recreational goods retaller with two divisions: Online and Stores. The two divisions both use the services of thecorporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.2 million a year. ManagersIn the two operating divisions are measured based on division operating profits.The following selected data are available for the two operating divisions:Revenues(5000)$ 74,10039,900OnlineStoresRequired:Determine the cost allocation if $3.8 million of the F and A costs are fixed and allocated on the basis of revenues, and the remainingcosts, which are variable, are allocated on the basis of transactions.Note: Do not round Intermediate calculations. Enter your answers in dollars, not in millions or thousands.FixedVariableTotal$Transactions(000)1,066.5283.5Online$Stores

Lets understand the basics. Cost of service department is required to be allocated to production…

Giardin Outdoors is a recreational goods retaller with two divisions: Online and Stores. The two divisions both use the se corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.2 million a ye In the two operating divisions are measured based on division operating profits. The following selected data are available for the two operating divisions: Online Stores Fixed Variable Total Revenues (5000) $ 74,100 39,900 Required: Determine the cost allocation if $3.8 million of the F and A costs are fixed and allocated on the basis of revenues, and th costs, which are variable, are allocated on the basis of transactions. Note: Do not round Intermediate calculations. Enter your answers in dollars, not in millions or thousands. $ Transactions (000) 1,066.5 283.5 Online 0 $ Stores

Giardin Outdoors is a recreational goods retaller with two divisions: Online and Stores. The two divisions both use the se corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.2 million a ye In the two operating divisions are measured based on division operating profits. The following selected data are available for the two operating divisions: Online Stores Fixed Variable Total Revenues (5000) $ 74,100 39,900 Required: Determine the cost allocation if $3.8 million of the F and A costs are fixed and allocated on the basis of revenues, and th costs, which are variable, are allocated on the basis of transactions. Note: Do not round Intermediate calculations. Enter your answers in dollars, not in millions or thousands. $ Transactions (000) 1,066.5 283.5 Online 0 $ Stores

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...

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Question

Giardin Outdoors is a recreational goods retaller with two divisions: Online and Stores. The two divisions both use the services of the
corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.2 million a year. Managers
In the two operating divisions are measured based on division operating profits.
The following selected data are available for the two operating divisions:
Revenues
(5000)
$ 74,100
39,900
Online
Stores
Required:
Determine the cost allocation if $3.8 million of the F and A costs are fixed and allocated on the basis of revenues, and the remaining
costs, which are variable, are allocated on the basis of transactions.
Note: Do not round Intermediate calculations. Enter your answers in dollars, not in millions or thousands.
Fixed
Variable
Total
$
Transactions
(000)
1,066.5
283.5
Online
$
Stores

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