ewey, Cheatum, and Howe, CPA%u2019s, has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time. If the audit division uses 250,000 minutes of computer time, what amount of variable costs will be allocated to the audit division?
A. $38,690
B. $87,500
C. $24,696
D. $73,500

Last month, PeeWee Company manufactured 20,000 units and sold 18,000 of these units at a price of $8.00 per unit. Manufacturing costs consisted of direct labor, $30,000; direct materials, $32,000; variable manufacturing overhead, $3,600; fixed manufacturing overhead, $21,600. Selling and administrative costs totaled $24,000.

Assume PeeWee uses variable costing? How much would the company's contribution margin increase if sales increased 10%?
A. 10%
B. more than 10%
C. less that 10%
D. cannot be determined

They are throwing a lot of numbers at you to see if you can pick out what is important. The question only asks for the variable costs allocated to the audit division. If you read your question over looking for the way variable costs only are determined you will find that they are based of minutes of usage. The total anticipated usage is 420,000 minutes. The audit dept. uses 250,000 minutes. The variable costs are $147,000. By looking at only these numbers, can you compute the variable costs to be allocated to the audit division?

You only need to understand the definitions of variable manufacturing costs and contribution margin to answer this question.

Variable costs increase in direct proportion to increases in sales.

Contribution margin is the marginal profit per unit of sale. The formula would be:
Unit sales price - unit variable cost

Does that make sense to you? If not, you could go the longhand route of computing the numbers. You know your sales and costs numbers now. Add 10% to sales and recompute to see the affect. If you do that, the info above will make sense. The fixed costs are not needed to answer this question.

Dewey, Cheatum, and Howe, CPA's, has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

What amount of variable costs will be allocated when a division uses a minute of computer time?
A. $0.47
B. $2.86
C. $1.55
D. $0.35

Dewey, Cheatum, and Howe, CPA's, has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

If the audit division uses 250,000 minutes of computer time, what amount of variable costs will be allocated to the audit division?
A. $38,690
B. $87,500
C. $24,696
D. $73,500

Dewey, Cheatum, and Howe, CPA's, has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

If the tax division uses 105,000 minutes of computer time this year, what is the total amount of computer department costs that will be allocated to the tax division?
A. $231,750
B. $199,250
C. $265,667
D. $162,500

Dewey, Cheatum, and Howe, CPA's, has three divisions: Audit, Tax, and Business Consulting. When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%. The managers agreed that the fixed costs of the computer department would be allocated based on these percentages. The variable costs of the computer department are allocated based on the minutes of computer time that each department uses. The computer department budget for fixed costs is $650,000, and the budget for variable costs is $147,000. The company anticipates using 420,000 minutes of computer time.

What amount of the computer department fixed costs will be allocated to the tax and business consulting divisions, respectively?
A. $44,100 and $29,400
B. $239,100 and $127,042
C. $195,000 and $130,000
D. $325,000 and $325,000

tlc3087 does not find this helpful : This is not telling me the answer

Of course it isn't. Please read this:

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I gave you the way to understand the problem and a simple calculation would give you the answer. I'd be happy to work with you to understand the answer, but just giving you the answer won't help you to learn or understand it.

Last month, PeeWee Company manufactured 20,000 units and sold 18,000 of these units at a price of $8.00 per unit. Manufacturing costs consisted of direct labor, $30,000; direct materials, $32,000; variable manufacturing overhead, $3,600; fixed manufacturing overhead, $21,600. Selling and administrative costs totaled $24,000.

Assume PeeWee uses full costing? How much would the company's gross margin increase if sales increased 10%?
A. 10%
B. more than 10%
C. less that 10%
D. cannot be determined

Is the answer 24,696?

Thank you for taking the time to copy your homework to AMHD.
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No. Tell me how you got that number so I can see what you are not understanding, and we'll go from there. I promise you will understand this when we get done. It shouldn't take long.