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Assignment Exercise 6–1: Allocating Indirect Costs
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- Compute the costs allocated to cost centers “Clerical Salaries,” “Administrative Salaries,” and “Computer Services” using the new allocation bases shown below. Use worksheet #1 that replicates the set up in Table 6–2. Total the new results. The new allocation bases are:
Assignment Exercise 6–2: Responsibility Centers
Choose among the Case Study in Chapter 27, the clinic in Mini-Case Study 2, or the Metropolis Health System information as contained in its Case Study and the Appendix that contains its financial statements. Designate the responsibility centers and the support centers for the organization selected. Prepare a rationale for the structure you have designed.
Assignment Exercise 7–1: Analyzing Mixed Costs
Initial Calculations
Assignment Exercise 7–2: Calculating the Contribution Margin
The Mental Health program for the Community Center has just completed its fiscal year end. The program director determines that his program has revenue for the year of $1,210,000. He believes his variable expense amounts to $205,000 and he knows his fixed expense amounts to $1,100,000.
Compute the contribution margin for the Community Center Mental Health Program.
What does the result tell you about the program?