Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

تمرين 23

Departmental Cost Allocation Barfield Corporation prepares business plans and marketing analyses for startup companies in the Cleveland area. Barfield has been very successful in recent years in providing effective service to a growing number of clients. The company provides its service from a single office building in Cleveland and is organized into two main client-service groups: one for market research and the other for financial analysis. The two groups are treated as cost centers with budgeted annual costs of $1,250,000 and $1,750,000, respectively. In addition, Barfield has a support staff that is organized into two main functions: one for clerical, facilities, and logistical support (called the CFL group) and another for computer-related support. The CFL group has a budgeted annual costs of $210,000, while the annual cost of the computer group is $600,000.
Tom Brady, CFO of Barfield, plans to prepare a departmental cost allocation for his four groups, and he assembles the following information:
Percentage of estimated dollars of work and time by CFL:

Percentage of estimated dollars of work and time by the computer group:

Required Use 4 or more decimal places (e.g., 33.3333%) in your calculations. Determine the total cost in the financial analysis and market research groups, after departmental allocation, using (a) the direct method, (b) the step method (CFL goes first), and (c) the reciprocal method.