Question

MURUMU 12 URS) #1. (4 Marks) Mr. Brown and Mr. Black own cleaning companies. They are considering renting a small sweeper to share between their two separate businesses. Mr. Brown requires the machine for a total of 900 hours and Mr. Black 600 hours. If each company rents the machine on their own, the hourly rate is $40. If they rent the machine together the hourly rate drops to $32 a) Calculate Mr. Brown's and Mr. Black's respective share of the cost using the stand-alone method b) Calculate Mr. Brown's and Mr. Black's respective share of the cost using the incremental - method. Assume Mr. Brown to be the primary party, #2. (8 Marks) E-Mark, an online store, has two operating divisions - Corporate Sales and Consumer Sales - and two support divisions -Admin and IT. Each operating division operates independently. E-Mark uses number of employees to allocate Admin costs and processing time to allocate IT costs. The following data are available for the month: SUPPORT DEPT Admin IT OPERATING DEPT Corp Sales Cons. Sales Budgeted costs incurred before any interdivision allocations $85,000 $200,000 $1,000,000 $500,000 Admin budgeted # of employees deployed 20 40 40 IT budgeted # of processing time deployed (minutes) 300 2,000 1,700 Using the reciprocal method, allocate the support department costs. Dik 24po/ BIW=36 74 X5212.9 X 32 - 0 0

Answer 1

sub y in ear 2 ated ş 200poo + 0.2(1015 22.8426) 2 200 000 + 20304 36852 • 220 30 4. 56852 It costs (3) (42:57) summover Operating dept support dept Colp dates 1000000 Cept before allocation Constaly 500000 Admir 85000 It 200000 (50%) (5:57) Allocations 00) sua ation Jotal 1785000 (49 49 -20) 40609-13 40609-13 (101522.8426) 20304.5 3 (42-5, 50,7.5,-)93629.44 1015 2.28 16522-14 (220304 SUN 134 238.57 650761 38 - Total 1785000 Solved