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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 20
Single versus Dual Rates: Ethical Considerations
A consulting firm has two departments, Corporate and Government. Computer support is common to both departments. The cost of computer support is $3 million. The following information is given:
Required
a. What is the cost charged to each department if the allocation is based on the number of gigabytes of storage
b. What is the cost charged to each department if number of consultants is the allocation basis
c. Most of the business in the Corporate Department is priced on a fixed fee basis, and most of the work in the Government Department is priced on a cost-plus fixed fee basis. Will this affect the choice of the allocation base Should it
A consulting firm has two departments, Corporate and Government. Computer support is common to both departments. The cost of computer support is $3 million. The following information is given:
Required
a. What is the cost charged to each department if the allocation is based on the number of gigabytes of storage
b. What is the cost charged to each department if number of consultants is the allocation basis
c. Most of the business in the Corporate Department is priced on a fixed fee basis, and most of the work in the Government Department is priced on a cost-plus fixed fee basis. Will this affect the choice of the allocation base Should it
Explanation
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Verified
(a)The common cost incurred jointly on v...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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