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 $35 million. The following information is given: Governmental Services Commercial Support Utilization. 55% 45 Revenues ($000) $ 224,360 407,640 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. Govermental services Commercial Support Required A Required B Required C What is the cost charged to each group if the allocation is based on the utilization? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Cost Allocation

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…