Prestige Financial Credit Company Produces Two Styles of Credit Reports

question 108

Essay

Prestige Financial Credit Company produces two styles of credit reports: Individual and Corporate. The difference between the two is the amount of background information and data collection required. The Corporate report uses more skilled personnel because additional checking and data are required. Total support service costs to be allocated are $3,200,000. The relevant figures for the year just completed follow:
$$\begin{array} { l r r } \text { Allocation base } & \text { Individual } & \text { Corporate } \\\text { Data purchased } & \$ 40,000 & \$ 80,000 \\\text { Research hours } & 24,000 & 30,000 \\\text { Interview hours } & 1,000 & 10,000 \\\text { Number of reports } & 16,000 & 3,000\end{array}$$
Required:
For each of the four potential allocation bases, determine the amount of support service cost allocated to each type of report. Round all percentages to two decimal places.

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Definitions:

Adult Illiteracy

The condition of being unable to read and write in adults.

Infant Mortality

The rate at which babies under one year of age die, often used as an indicator of the overall health of a population.

Demographic Data

Information collected about the characteristics of human populations, such as age, gender, and income levels.

Demographic Transition

A theory describing the transition from high birth and death rates to lower birth and death rates as a country develops from a pre-industrial to an industrialized economic system.