Financial Planning 150 employees $ 10,000,000 Business Consulting 50 employees $ 5,000,000
( a ) Allocate the $ 1,000,000 common costs to the two revenue departments using both methods . ( b ) Why are allocations called arbitrary ? Points Received : 25 of 25 3 . Question : ( TCO 10 ) Charlie Corp sells it products on both credit and cash basis . Monthly sales are sold 20 % for cash , 80 % for credit . Credit sales are collected 40 % in the month of sale and 60 % the following month . Sales for the first quarter are as follows :
January $ 100,000 February $ 150,000 March $ 125,000
Compute cash collections for February . Points Received : 25 of 25 4 . Question : ( TCO 2 ) Acme Fireworks uses a traditional overhead allocation based on direct labor hours . For the current year overhead is estimated at $ 1,000,000 and direct labor hours are budgeted at 200,000 hours . Actual hours worked were 195,000 and actual overhead was $ 978,000 .
( a ) Compute the predetermined manufacturing overhead rate . ( b ) Compute the applied manufacturing overhead .