A company has a processing department with 10 stations. Because of the nature and use of three of these stations, each is considered a separate cost center for IDC allocation. The remaining seven are grouped as one cost center, CC190. Operating hours are used as the allocation basis for all stations. A total of $250,000 is allocated to the department for next year. Use the data collected this year to determine the IDC rate for each center. Cost Center IDC Allocated Operating Hours CC100 $25,000 800 CC110 $50,000 200 CC120 $75,000 1200 CC190 $100,000 1600
A company has a processing department with 10 stations. Because of the nature and use of three of these stations, each is considered a separate cost center for IDC allocation. The remaining seven are grouped as one cost center, CC190. Operating hours are used as the allocation basis for all stations. A total of $250,000 is allocated to the department for next year. Use the data collected this year to determine the IDC rate for each center. Cost Center IDC Allocated Operating Hours CC100 $25,000 800 CC110 $50,000 200 CC120 $75,000 1200 CC190 $100,000 1600
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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Question
A company has a processing department with 10
stations. Because of the nature and use of three of
these stations, each is considered a separate cost
center for IDC allocation. The remaining seven are
grouped as one cost center, CC190. Operating
hours are used as the allocation basis for all stations.
A total of $250,000 is allocated to the department
for next year. Use the data collected this
year to determine the IDC rate for each center.
Cost Center IDC Allocated Operating Hours
CC100 $25,000 800
CC110 $50,000 200
CC120 $75,000 1200
CC190 $100,000 1600
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