The Personnel Department at Hernandez Bros. is centralized and provides services to the two operating units:...

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The Personnel Department at Hernandez Bros. is centralized and provides services to the two operating units: Miami and New Yo

following. Number of employees Number of new hires Number of employees departing Miami New York 1,210 310 11 21 19 29

controllers office to estimate the amount of Personnel Department cost associated with routine personnel matters (benefits,

TITLURILIITRITUMUrruu LIIULILITY y Jepuruluu II vvrricuu costs on this basis, the rates would be $210 per employee for routin

Recompute the costs allocated to each unit using the separate rates for routine and transitional matters.

Miami New York a. Using current allocation system Using separate rates b.

business accounting

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Answer 1

Answer #1

A) current allocation system based on employee

Miami department = $510 per employee * 1210 employee = $617100

New York = $510*310 employee = $158100

B) new system

1. Miami department

Employee cost = $210*1210 employee =$254100

Transition cost = $5700*(11+19) = $171000

Total cost = $425100

2. New York department

Employee cost = $210*310 employee = $65100

Transition cost = $5700*(21+29) = $285000

Total cost = $350100

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Answer 2

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