Exercise 13-26

Insert your answers in the gray-shaded cells. Insert formulas where

appropriate. If an answer is incorrect, the word “wrong” will appear.

Cost Allocation using Step Method

Amount

x

Percent

=

Allocation

Administration:

Personnel

$5,40,000

10%

Accounting

   5,40,000

10%

Checking

   5,40,000

30%

Savings

   5,40,000

40%

Loans

   5,40,000

10%

Total

Personnel:

Accounting

$4,14,000

11%

Checking

   4,14,000

33%

Savings

   4,14,000

22%

Loans

   4,14,000

33%

Total

Accounting:

Accounting

$4,00,000

50%

Checking

   4,00,000

25%

Loans

   4,00,000

25%

Total

Total cost for each revenue-generating area: 

Checking:

$ 11,30,000

Savings:

$   7,45,500

Loans:

$   9,67,000

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