The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up La

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The Personnel Department At Lastcall Enterprises Handles Many Administrative Tasks For The Two Divisions That Make Up La 1 (516.03 KiB) Viewed 16 times

The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up LastCall: Laid Back and Stressed Out. Laid Back division manages the company's traditional business line. This business, although lucrative, is currently not growing. Stressed Out, on the other hand, is the company's new business, which has experienced double-digit growth for each of the last three years. The cost allocation system at LastCall allocates all corporate costs to the divisions based on a variety of cost allocation bases. Personnel costs are allocated based on the average number of employees in the two divisions. There are two basic activities in the Personnel Department. The first, called employee maintenance, manages employee records. Virtually all of this activity occurs when employees are hired or leave the company. The other activity is payroll, which is an ongoing activity and requires the same amount of work for each employee regardless of the employee's salary. Assorted data for LastCall for the last year follow. Number of employees (average) Employees hired/leaving LaidBack 110 7 Employee maintenance Payroll Total StressedOut 35 11 The Personnel Department incurred the following costs during the year. $ 90,000 14,500 $104,500 Total 145 18
Required: a. Under the current allocation system, what are the costs that will be allocated from personnel to Laid Back? To Stressed Out? b. Suppose the company implements an activity-based cost system for personnel with the two activities, employee maintenance and payroll. Use the number of employees hired/leaving as the cost driver for employee maintenance costs and the average number of employees for payroll costs. What are the costs that will be allocated from personnel to LaidBack? To StressedOut? Complete this question by entering your answers in the tabs below. Required A Required B Under the current allocation system, what are the costs that will be allocated from personnel to Laid Back? To Stressed Out? (Do not round intermediate calculations and round your answers to the nearest whole dollar.) Allocated costs LaidBack StressedOut
Required: a. Under the current allocation system, what are the costs that will be allocated from personnel to LaidBack? To Stressed Out? b. Suppose the company implements an activity-based cost system for personnel with the two activities, employee maintenance and payroll. Use the number of employees hired/leaving as the cost driver for employee maintenance costs and the average number of employees for payroll costs. What are the costs that will be allocated from personnel to LaidBack? To StressedOut? Complete this question by entering your answers in the tabs below. Required A Required B Suppose the company implements an activity-based cost system for personnel with the two activities, employee maintenance and payroll. Use the number of employees hired/leaving as the cost driver for employee maintenance costs and the average number of employees for payroll costs. What are the costs that will be allocated from personnel to Laid Back? To Stressed Out? Employee maintenance Payroll LaidBack StressedOut