>> Managerial Accounting
Wyoming Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar's Department, and the Computer Services Department.
The comptroller has compiled the following data for the year just ended.
Department Annual Cost
Computer Services 468,000
Credit Hours Planned Courses
Requiring Computer Work
Liberal Arts 2,300 43,000 25
Sciences 1,450 37,750 37
Business Administration 1,350 31,750 37
1. Distribute the departmental costs to the college's three divisions based on the allocation base given. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)
2. Choose the better allocation base for distributing the cost to the departments.
In this solution we have calculated the cost allocated to various departments of the organization. Apart from that alternative method of cost allocation is also discussed.