Question
Problem 6-58 (Algo) Predetermined Rates and Product Profitability: Two Stage Cost Allocation (LO 6-3, 4, 5)
Answers
rA) engineer: 140,000/28,000= 5
user related: 230,000/ 28,750= 8
revenue related: 171,250/ 3,425,000= 0.05 or 5%
rB)
rB) toot tix
revenue +1,650,000 +1,775,000
engineer cost -320,000 -401,250
engineer admin cost -80,000 -60,000
user related admin cost -88,000 -142,000
revenue admin cost -82,500 -88,750
profit(answer) 1,079,500 1,083,000
engineer 16,000* 5= 80,000 5* 12,000= 60,000
user: 8* 11,000= 88,000 8* 17,750= 142,000
revenue: 5%* 1,650,000= 82,500 5%* 1,775,000= 88,750
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