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lisov135 [29]
3 years ago
15

Silver Corporation incurred costs of $600,000 for managing the wholesale division during the year. The customer details of the c

ompany were as follows: X Y Z Sales $600,000 $400,000 $200,000 COGS $40,000 $20,000 $15,000 How much cost will be allocated to customer Y, if a cause-effect relationship cannot be established with any cost driver
Business
1 answer:
elena-s [515]3 years ago
8 0

Answer: $200,000

Explanation:

The cost will be allocated to customer Y, if a cause-effect relationship cannot be established with any cost driver will be calculated thus:

Total sales = $600,000 + $400,000 + $200,000 = $1,200,000

The percentage of Y on total sales will be:

= $400,000/$1,200,000 × 100

= 1/3 × 100

= 33.33%

Therefore, the cost that's allocated to Y will then be:

= $600,000 × 33.33%

= $600,000 × 0.3333

= $200,000

Therefore, the correct answer is $200,000

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3 years ago
Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net
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