ABC Corporation has three support departments with the following costs and cost drivers: Support Department Cost Cost Driver
Graphics Production $200,000 number of copies made
Accounting 500,000 number of invoices processed
Personnel 400,000 number of employees
ABC has three operating divisions, Micro, Macro, and Super. Their revenue, cost, and activity information are as follows:
Micro Macro Super
Revenues $700,000 $850,000 $650,000
Direct operating expenses 50,000 70,000 100,000
Number of copies made 20,000 30,000 50,000
Number of invoices processed 700 800 500
Number of employees 130 145 125
The support department cost that will be allocated to the Super Division is:-
a. $125,000
b. $550,000
c. $100,000
d. $350,000
The operating income of the Micro Division after all support department allocations will be:
a. $650,000
b. $345,000
c. $610,000
d. $305,000
The support department allocation rate for Graphics Production is:
a. $2.00
b. $10.00
c. $6.66
d. $0.50
The support department allocation rate for the Personnel Department is:
a. $2,758
b. $1,000
c. $3,200
d. $3,077