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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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 (5000) $ 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
Transcribed Image Text: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 (5000) $ 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
Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the cost charged to each group if revenue is the allocation basis? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Governmental Services Commercial Support Required A Complete this question by entering your answers in the tabs below. Cost Allocation Required B Yes No < Required A Required 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? Required C > < Required B Required C>
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the cost charged to each group if revenue is the allocation basis? Note: Do not round intermediate calculations. Enter your answers in dollars, not in millions or thousands. Governmental Services Commercial Support Required A Complete this question by entering your answers in the tabs below. Cost Allocation Required B Yes No < Required A Required 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? Required C > < Required B Required C>
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