Question regarding cost management

Assignment Help Accounting Basics
Reference no: EM13115516

A company has two major businesses that it operates. One business manufactures and sells unicycles for commercial use in circuses, etc. (total sales of $150M), and the other sells bicycles to the public (total sales of $20M). The unicycle business occupies 75,000 square feet of the manufacturing warehouse and the bicycle business occupies the remaining 25,000 square feet. Cost were split 50-50 between the 2 businesses for advertising (total advertising expense of $5M) and warehouse expense (total warehouse expense of $3M) in the past (traditional method).

What was the cost of advertising and warehouse expense allocated to each of the business based on the traditional method?

What recommendation would you make in allocating these expenses to each of the business and how much would be allocated to each business?

What would be some of the issues of too many expenses or too little expenses being allocated to each of the businesses?

Reference no: EM13115516

Questions Cloud

Costs-fixed and variable costs : Costs can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are running a restaurant and have identified certain costs along with the number of annual units ..
How many moles of ozone would there be in the air : As of the writing of this text, EPA standards limit atmospheric ozone levels in urban environments to 84ppb. How many moles of ozone would there be in the air above Los Angeles County.
Critically compute investing next generation of leaders : Critically compute investing next generation of leaders which result in competitive advantage Organisation through increased Cross functional Responsibilities
Describe how a linear sequence of amino acids gives rise : Describe how a linear sequence of amino acids gives rise to the three-dimensional structure of proteins. Detail the significance of this structure, how it may be modified, and the results of such modification.
Question regarding cost management : What was the cost of advertising and warehouse expense allocated to each of the business based on the traditional method? What recommendation would you make in allocating these expenses to each of the business and how much would be allocated to eac..
Compute to measure the percentage of variance accounded : Using a two-tailed test with a=.05 is there a significant difference between the two treatment conditions? c. compute r2 to measure the percentage of variance accounded for the by the treatment effect.
Compute the initial acceleration of the mass attached to l1 : The rod is held in the horizontal position shown and then released. Compute the initial acceleration of the mass attached to l1. Assume up is positive and down is negative
Write a general formula for a-amino acids : Write a general formula for a-amino acids and draw the actual formulas for any two named amino acids you choose. What is a peptide bond?
What is the average rate of the reaction : In the first 12.0 of the reaction, 1.8×10-2 of is produced in a reaction vessel with a volume of 0.260 . What is the average rate of the reaction over this time interval.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Finding correct consolidated statements

Giant produces consolidated financial statements to combine the two companies. Which of the following statements is correct about these consolidated statements?

  Taxable business income

Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn't keep any significant inventories of the specialized assets that he sells.

  Relational database model

Identify the different entities and their associated attributes that would be found in your potential relational database model for your sales database, pertaining to the hotel industry.

  Managing product-harm crisis

Define a product-harm crisis. Identify the factors that contribute to a product-harm crisis. Compare and contrast the findings of the various studies on product-harm crisis.

  Advanced accounting-journal entries

Prepare all journal entries in all funds and the GCA and GLTL accounts to record the following transactions and events.

  Advanced accounting-eliminating debt kordel

Kordel Inc. acquired 75% of the outstanding common stock of Raxston Corp. Raxston currently owes Kordel $500,000 for inventory acquired over the past few months.

  Determine the amount of overhead

Compute the predetermined overhead rate. Compute the overhead applied. Find out the amount of overhead that is over or under applied.

  Journalize prouncer march payroll-related liabilities

Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April and prepare the entry to record the company's payroll tax expense.

  Accounting multiple choice questions

Suppose that the total cost for your current year in college equals $20,000. Approximately how much would your parents have required to invest twentyone years ago in an account paying 8 percent compounded annually to cover this amount?

  Information about quality control costs

How would I figure the monthly quality costs when I use overhead through the basis of direct labor costs? Then what would I do to figure out the quality costs though an ABC system?

  Quantitative analysis for management-statistical analysis

What is the maximum revenue per year, how many medical patients/year are there, and how many surgical patients/year are there? How many medical beds and how many surgical beds of the 90-bed addition should be added?

  Journal entries-stockholders equity

How much total cash did Markus raise through the January 15, 2011, stock issuance? How are these journal entries recorded?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd