To allocate corporate costs to divisions, the ideal situation would be for the allocation base to have the best cause-and-effect relationship with the costs.
Corporate overhead is constructed from the costs incurred to run the executive facet of an enterprise. those prices encompass the accounting, human sources, felony, marketing, and sales features. Whilst corporate costs are incurred, they're considered to be period charges, and so are charged to cost as incurred.
Overhead expenses are extraordinary from working fees, together with raw materials or employee wages, that are directly related to a company's services and products. Corporate costs may additionally track overhead and other fees to determine their destroy-even factors and perceive approaches to cut costs.
Commercial enterprise prices may also be called deductions. In widespread, organizations have some limitations and unique concerns for enterprise fee deductions. they may be commonly divided into corporate costs and operational costs.
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Net operating working capital (NOWC) is the excess of working current belongings over running present-day liabilities.
Running capital, additionally called net running capital, represents the difference between an organization's modern-day property and cutting-edge liabilities. working capital is a measure of an employer's liquidity and quick-time period economic health.
Operating working capital focuses more on operations, while net running capital looks in any respect for property and liabilities. net working capital is more comprehensive because it represents the cash and other cutting-edge property a corporation has every day daily running and growing its enterprise.
Internet running capital is an economic metric that gauges the difference between an employer's non-interest-bearing running belongings and its non-hobby charging running liabilities.
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Based on the perpetual system, a buyer can incur cash freight costs if they transport <u>Inventory</u>.
<h3>How are freight costs treated?</h3>
The perpetual system allows for the buyer of inventory to record the freight cost for the merchandise in the inventory account.
This means that the freight cost will be capitalized and added to the cost of the inventory to recover the costs.
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Answer:
Req 1 15 $ cost per call
Req 2 Delux = 6,750$ and Basic 2,250$.
Explanation:
This question has two requirement one is to determine the company's cost of technical support per customer service call (Req 1) and the other is to assign technical support cost to each model using activity based costing (Req 2).
Req 1
The first requirement is quite simple. Cost of technical support per customer service call can be determine by dividing expected cost with expected number of customer service call we can get our answer
Cost per CSC =150000/10000 = 15
Req 2
Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.
In this question company has two product i.e delux and basic model. Cost for each product can be determine by multplying cost per csc with number of call received for each product.
Delux= 450*15 = 6750
Basic= 150*15 = 2250
Answer:
$347,769.72
Explanation:
yearly expense = present estimation of all expenses/PVAF(r,n)
PVAF or present worth annuity factor is the aggregate of limiting elements at a given occasional rate r for n number of periods .
Identical Annual Cost
= 864,868.52/PVAF(10%,3 years)
= 864,868.52/2.4869
= $347,769.72
