This support department supports both of the company's operating divisions: microcomputer division and peripheral division.

The followingbudgeted informationis available for the year 2019:

Fixed cost $ 120,000

Available capacity 3,500,000 pages

Budgeted usage

Department A 1,000,000 pages

Department B 3,000,000 pages

Variable cost 0.03 per page

Actual usage for the year was as follows:

Department A1,500,000 pages

Department B2,000,000 pages

The company seeks to allocate the costs of the computer support department to the two operating divisionsfor the purposes of performance evaluationafter year end. For this purpose, the budgeted numbers above represent the long-term normal average usage.

REQUIRED:

2. What do we mean by a "decentralized" organization?
4. If a company is really decentralized,WHYwould they operate the computer support department in a centralized manner? Why shouldn't this function be decentralized as well?
6. Using the Direct method, determine thecharge ratefor photocopy department services.
8. Determine the amount of support-department cost that would be charged to each operating division for 2019. That is, compute the amount of support-department costs that each user division would be held accountable for
10. You are the manager in charge of Department A.... do you like this answer? Why or Why not? If not, what allocation do YOU think should be proper?

Answer rating: 100% (QA)

1 What do we mean by a decentralized organization In a decentralized organization decisionmaking authority and responsibility are distributed among va... View the full answer