Exercise 12-36 Single versus Dual Rates (LO 12-6,7) A consulting firm has two de

Question

Exercise 12-36 Single versus Dual Rates (LO 12-6,7) A consulting firm has two departments, Corporate and Government. Computer support is common to both departments The cost of computer support is $11.57 million. The following information is given: Gigabytes of Storage 91,200 42,800 Number of Consultants 150 165 Corporate Government Required What is the cost allocation if fixed computer costs of $8.75 million are allocated on the basis of number of consultants and the remaining costs (all variable) are allocated on the basis of the number of gigabytes of storage used by the department? (Do not round intermediate calculations. Enter your answers in thousands of dollars.) Corporate Government Fixed Variable Total

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of computer support      11,570,000.00 Allocated on basis of consultant - Fixed         8,750,000.00 Allocated on basis of gigabytes - Variable         2,820,000.00 Total Consultant no = 150 + 165                     315.00 Total Gigabytes = 91200 + 42800            134,000.00 Particulars Coporate Government Fixed Corporate = 150/315 * 8.75M Government = 160/315 *8.75M         4,166,666.67       4,583,333.33 Variable Corporate = 91200/134000 * 2.82M Government = 42800/134000 * 2.82M         1,919,283.58           900,716.42 Total         6,085,950.25       5,484,049.75

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