Tenet engineering Inc. operates two user divisions as separate cost objects. To determine t5he costs of each
Question:
Tenet engineering Inc. operates two user divisions as separate cost objects. To determine t5he costs of each division, the company allocates common costs to t6eh divisions . during the past month, the following common costs were incurred:
Computer services(85% fixed) | $345,000 |
Building occupancy | 686,000 |
Personal costs | 153,000 |
Total common costs | $1184,000 |
The following information is available concerning various activity measures and service usages by each of the divisions:
Area occupied (Square feet) | Division A | Division B |
Payment | 24,000 | 48,000 |
Computer time (hours) | $422,000 | $222,000 |
Computer storage(megabytes) | 260 | 280 |
Equipment value | 8,700 | 0 |
Operating profit (pre-allocating) | 263,000 | 313,000 |
| 682,500 | 622,500 |
| | |
A. $100,258
B. $102,078
C. $83758
D. $153,000