Susan Hansen is the manager of American Autos. American Autos provides three types of services, Sales, Repairs, and Rebuilds, Susan needs to provide a profit analysis to the CEO at the end of the current fiscal year so the pricing and marketing strategies can be adjusted as needed. She has gathered the following information for the company. Cost # of employees Maint Hours HR Hours Revenue Marketing $219,000 Sales $992,000 5 50 100 Support Departments Maintenance. $320,000 Repairs $1,302,000 7 300 25 HR $49,000 Rebuilds $2,108,000 2 25 180 Operating Units Repairs $364,000 $870,000 Sales 12 800 1,200 16 1,900 850 Rebuilds $1,098,000 6 2,600 800

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Allocate the support department costs to the operating units using the reciprocal method. (Do not round the Intermediate
calculations. Round answers to 0 decimal places, e.g. 5,275.)
Sales
$
LA
Repairs $
Rebuilds $
Transcribed Image Text:Allocate the support department costs to the operating units using the reciprocal method. (Do not round the Intermediate calculations. Round answers to 0 decimal places, e.g. 5,275.) Sales $ LA Repairs $ Rebuilds $
Susan Hansen is the manager of American Autos. American Autos provides three types of services, Sales, Repairs, and Rebuilds. Susan
needs to provide a profit analysis to the CEO at the end of the current fiscal year so the pricing and marketing strategies can be
adjusted as needed. She has gathered the following information for the company.
Cost
# of employees
Maint Hours
HR Hours:
Revenue
Marketing
$219,000
Sales
$992,000
5
50
100
Support Departments
Maintenance
$320,000
Repairs
$1,302,000
7
300
25
HR
$49,000
Rebuilds
$2,108,000
2
25
180
Sales
$364,000
12
800
1,200
Operating Units
Repairs
$870,000
16
1,900
Rebuilds
$1,098,000
6
2,600
800
Transcribed Image Text:Susan Hansen is the manager of American Autos. American Autos provides three types of services, Sales, Repairs, and Rebuilds. Susan needs to provide a profit analysis to the CEO at the end of the current fiscal year so the pricing and marketing strategies can be adjusted as needed. She has gathered the following information for the company. Cost # of employees Maint Hours HR Hours: Revenue Marketing $219,000 Sales $992,000 5 50 100 Support Departments Maintenance $320,000 Repairs $1,302,000 7 300 25 HR $49,000 Rebuilds $2,108,000 2 25 180 Sales $364,000 12 800 1,200 Operating Units Repairs $870,000 16 1,900 Rebuilds $1,098,000 6 2,600 800
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