a. Under the current allocation system, what is the cost that will be allocated from accounts receivable to personal? And to business? b. Suppose the company implements an activity based cost system for accounts receivable with two activities, billing and dispute resolution. What is the cost that will be allocated from accounts receivable to personal and to business using the number of bills prepared as the cost driver for billing costs and the number of disputes for dispute resolution cost?

Check my work 11 John's Custom Computer Shop (JCCS) assembles computers for both individual and corporate customers. The company is organized into two divisions: Personal and Business. Once a computer is built, it is shipped to the customer. Billing for all customers is handled by the corporate Accounts Receivable Department. Accounts Receivable performs two major activities: billing and dispute resolution. Billing refers to preparing and sending the bills as well as processing the payments. Dispute resolution occurs when a customer refuses to pay, usually due to an error in billing. 1.5 points The costs of the Accounts Receivable Department are allocated to the two divisions based on the number of bills prepared. Kyle, the manager of the Business division, has complained that the allocated costs from Accounts Receivable are beginning to make the business division look unprofitable and has asked you to recommend some changes to the allocation system. If he agrees with your eBook recommendation, he will pass them on to the chief financial officer. Print Data on costs and activities in the Accounts Receivable Department follow. Personal Business Total Number of bills prepared 550 300 850 Number of disputes 60 15 75 The Accounts Receivable Department Incurred the following costs during the year. Billing $ 29,750 Dispute resolution 37,500 Total $ 67.250 Mc Graw Hill 1:52 Type here to search O L O W 64 . F 9/17/