The Brower School of Vocational Technology has organized the school training pro

Question

The Brower School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dental hygiene, and office technology. The school’s owner. Candice Brower, wants to know how much it costs to operate each of the three departments. To accumulate the total cost for each department, the accountant has identified several indirect costs that must be allocated to each. These costs are $10,080 of phone expense, $2,016 of office supplies, $720,000 of office rent, $144,000 of janitorial services, and $150,000 of salary paid to the dean of students. To provide a reasonably accurate allocation of costs, the accountant has identified several possible cost drivers. These drivers and their association with each department follow.

Cost Driver                     Department 1 Department 2 Department 3
Number of telephones            28               32                  52
Number of faculty members    20              16                   12
Square footage of office supplies 28,800 16,800           12,000
Number of secretaries           2 2                     2

a. Identify the appropriate cost objects.
b. Identify the appropriate cost driver for each indirect cost and compute the allocation rate for assigning each indirect cost to the cost objects.
c. Determine the amount of telephone expense that should be allocate to each of the three departments.
d. Determine the amount of supplies expense that should be allocated to Department 3.
e. Determine the amount of office rent that should be allocated to Department 2.
f. Determine the amount of janitorial services cost that should be allocated to Department 1.
g. Identify two cost drivers not listed here that could be used to allocate the cost of the dean’s salary to the three departments.

Explanation / Answer

Activity

Cost Drivers

Phone Expenses

Number of telephones

office supplies

Sqare footage of office

office rent

Sqare footage of office

janitorial services

Salries paid

Number of faculty

Dept

1

2

3

Total

Telephone bill

10080

10080

10080

Cost drive

28

32

52

112

For each Department

2520

2880

4680

Activity

Cost Drivers

Phone Expenses

Number of telephones

office supplies

Sqare footage of office

office rent

Sqare footage of office

janitorial services

Number of Secreataties

Salries paid

Number of faculty

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.