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The Cost Accountant Determined $1,700,000 of the Server Network's Costs

question 68

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The cost accountant determined $1,700,000 of the server network's costs were fixed and should be allocated based on the number of connections.The remaining costs should be allocated based on the time on the network.What is the total server network costs allocated to the Commercial Division assuming the company uses dual-rates to allocate common costs?

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Definitions:

Activity Base

This term is associated with cost accounting and refers to a measure of activity that is used as a basis for allocating costs to cost objects.

Number of Miles

The number of miles refers to the total distance measured in miles, often used in contexts such as travel, transportation, and delivery services.

Controllable Revenues

Income over which a business or manager has direct control, often affected by decisions on pricing and marketing.

Profit Centers

Parts of an organization that directly add to its profit through their activities, treated as separate entities for financial management purposes.

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