Buildz Corp Has Been Servicing the Production Casting Department for Five

question 12

Essay

Buildz Corp has been servicing the Production Casting Department for five years. Beginning next year, the company is adding a Production Molding Department to compliment the materials produced by the Production Casting Department. As a result, data center costs are expected to increase from $800,000 per year to $1,000,000 per year. The Production Molding Department will use 20% of the data center efforts.
Required:
a.Using the stand-alone cost-allocation method, identify the amount of data center cost that will be allocated to Production Casting and the Production Molding Department next year.
b.Using the incremental cost-allocation method, identify the amount of data center cost that will be allocated to Production Casting and the Production Molding Department next year.

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Definitions:

Qualitatively

Pertaining to or concerned with descriptions and distinctions made in terms of qualities rather than quantitative measurements.

Hypothesis Testing

A method used in scientific research to determine if there is sufficient evidence to support a predicted relationship or effect.

Replicate Previous Research

Replicating previous research involves conducting a new study based on the methodology of an existing study to validate or challenge its findings.

Committed Fraud

Refers to the act of deliberately deceiving someone in order to gain an unfair or illegal advantage, often financial.