A. Costs Allocated for Industrial Divisions Using the Direct Method | ||||||
Retail | Industrial | |||||
Activity -1 | Activity - 2 | Activity -3 | Activity - 4 | Activity -5 | Total Cost | |
Personal | 6731.7073 | 26926.829 | 40390.244 | 0 | 17951.22 | 92000 |
Administrative | 0 | 63750 | 106250 | 0 | 0 | 170000 |
Cost allocated | 6731.7073 | 90676.829 | 146640.24 | 0 | 17951.22 | |
Working | ||||||
For Personal cost, it is allocated basis on Number of Personal. There fore total base = 3+12+18+0+8=41 | ||||||
Retail Activity 1 - 92000x3/41=6731.7073 | ||||||
Retail Activity 2 - 92000x3/41=26926.82 | ||||||
Industrial Activity 3 - 92000x18/41=40390.24 | ||||||
Industrial Activity 4 - 92000x0/41=0 | ||||||
Industrial Activity 5 - 92000x8/41=17951.21 | ||||||
For administration cost, it is allocated the basis of Direct Cost for Activity 2 & 3. | ||||||
Retail Activity 2 - 170000x240/640=63750 | ||||||
Industrial Activity 3 - 17000x400/900=106250 |
B. Costs Allocated for Industrial Divisions Using the Step-Down Method | |||||||
Retail | Industrial | ||||||
Personal | Administrative | Activity -1 | Activity - 2 | Activity -3 | Activity - 4 | Activity -5 | |
Personal | 92000 | 170000 | |||||
Personal to other Departments | -92000 | 10000 | 6000 | 24000 | 36000 | 0 | 16000 |
Administrative | -180000 | 67500 | 112500 | 0 | 0 | ||
Cost allocated | 6000 | 91500 | 148500 | 0 | 16000 |
Working |
Personal to other Departments = 5+3+12+18+8 |
Administrative= 92000X5/46= 10000 |
Retail Activity1 = 92000x 3/46=6000 |
Retail Activity2 = 92000x 12/46=24000 |
Industrial Activity3 = 92000x 18/46=36000 |
Industrial Activity5 = 92000x 8/46=16000 |
Working |
Administrative to other Departments = 240+400=640 |
Retail Activity2 = 18000x 240/640=67500 |
Industrial Activity3 = 18000x 400/640=112500 |
westion 3 PriceWaterhouseCoopers provides consulting services for a variety of clients. The company has two producing...
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