Current Attempt $in$ Progress

$As$ the managing partner $of$ Sheridan Accounting Services $(HAS),$ Adam $is$ trying $to$ compare the profitability results $of$ the

firm's three different business lines: Audit, Tax, and Advisory Services. These three operating divisions are supported $by$ three

support departments: Billing, Human Resources, and $IT.$ The cost drivers $(or$ allocation bases$)$ for each $of$ the support

departments, along with each department's usage $of$ those services and its own original costs, are $as$ follows.

$(a)$

Your answer $is$ correct.

Rank the three support departments $by$ their original costs, and then allocate the support department costs using the step

method. $(Round$ intermediate calculations $to4$ decimal places, $e.g.15\mathrm{.}2516$ and final answers $to2$ decimal places, $e.g.15\mathrm{.}25.)(b)$

Your Answer

Correct Answer

Your answer $is$ correct.

Rank the three support departments based $on$ the percentage $of$ their service provided $to$ other support departments, and

then allocate their costs using the step method. $(Round$ intermediate calculations $to4$ decimal places, $e.g.15\mathrm{.}2516$ and final

answers $to2$ decimal places, $e.g.15\mathrm{.}25.)$

$(c1)$

The total revenue earned $by$ each operating division $is$ Audit, $$776,000$; Tax, $$1,234,000$; and Advisory, $$600,000.$ Evaluate

the profitability $of$ each operating division, first using the costs from part $(a)$ and then using the costs from part $(b).$

Compare the gross margin percentages for each $of$ these divisions $to$ their profit margin percentages. $(Round$ percentage

answers $to1$ decimal place, $e.g.15\mathrm{.}2\%$ and dollar answers $to2$ decimal places, $e.g.15\mathrm{.}25.)15\mathrm{.}2\%$ and dollar answers $to2$ decimal places, $e.g.15\mathrm{.}25.(c1)$

The total revenue earned $by$ each operating division $is$ Audit, $$776,000$; Tax, $$1,234,000$; and Advisory, $$600,000.$ Evaluate

the profitability $of$ each operating division, first using the costs from part $(a)$ and then using the costs from part $(b).$

Compare the gross margin percentages for each $of$ these divisions $to$ their profit margin percentages. $(Round$ percentage

answers $to1$ decimal place, $e.g.15\mathrm{.}2\%$ and dollar answers $to2$ decimal places, $e.g.15\mathrm{.}25.)$