Redrum Company Has Four Divisions and Allocates Central Costs to Each

Essay

Redrum Company has four divisions and allocates Central costs to each division based on one of three cost drivers as follows: $$\begin{array} { l l l l l } & \text { North } & \text { South } & \text { East } & \text { West } \\\text { Revenue } & \$ 16,250 & \$ 20,750 & \$ 14,500 & \$ 17,750 \\\text { Cost of goods sold } & 10,250 & 14,750 & 10,500 & 13,750 \\\text { Total assets } & 20,000 & 24,000 & 19,250 & 22,250\end{array}$$ Total central costs were $17,500.
Required:
Allocate the Central costs to the four divisions based on the following cost drivers:
a. revenue
b. cost of goods sold
c. total assets