AC2720 Wk4 Exercise 1

# AC2720 Wk4 Exercise 1 - Problem 1 Part 1 Direct and...

• Homework Help
• 7

This preview shows pages 1–7. Sign up to view the full content.

Problem 1 Direct and step-down allocation Part 1:

This preview has intentionally blurred sections. Sign up to view the full version.

Problem 2 Allocation of common costs

This preview has intentionally blurred sections. Sign up to view the full version.

Problem 3 Allocation of c Part 1 a: Davenport’s method based on number of cars sold: Sales Location Percentage (1) (2) (3) = (2) ÷ units East 4620 0.33 West 1120 0.08 North 3220 0.23 South 5040 0.36 Part 1 b: Stand-alone method Sales Location Percentage (1) (2) (3) = (2) ÷ units East 261600 0.12 West 392400 0.18 North 697600 0.32 South 828400 0.38 Part 1 c: Incremental method (locations ranked in order of largest advertising dollars to smallest adv Sales Location Allocated Cost East 828400 871600 West 697600 174000 North 17400 South Part 2: East West North Cars Sold \$ 561,000.00 \$ 136,000.00 \$ 391,000.00 Number of cars sold Stand Alone Cost Cost Remaining to Allocate
Stand-alone \$ 204,000.00 \$

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 306,000.00 \$ 544,000.00 Incremental \$ - \$ 174,000.00 \$ 697,600.00 From the above summary, we can see that south locaTon has to bear the highest amount of adver borne a single penny under incremental allocaTon method. ±herefore, Stand-alone method seems to be the ideal method for allocaTon of adverTsing costs. common costs Joint Cost Allocation (4) (5) = (3) × (4) 1700000 561000 1700000 136000 1700000 391000 1700000 612000 Joint Cost Allocation (4) (5) = (3) × (4) 1700000 204000 1700000 306000 1700000 544000 1700000 646000 verTsing dollars): South \$ 612,000.00 \$ 646,000.00 \$ 828,400.00 rTsement costs in any of the three methods. Whereas, East locaTon do not...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern