Exercise 4-2A Allocating costs between divisions Beasley Services Company (BSC) has 50 employees, 28 of...
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Exercise 4-2A Allocating costs between divisions Beasley Services Company (BSC) has 50 employees, 28 of whom are assigned to Division A and 22 to Division B. BSC incurred $450,000 of fringe benefits cost during 2018 Required Determine the amount of the fringe benefits cost to be allocated to Division A and to Division B 4-2. Step 1. Determine the allocation rate: Allocation rate = TL cost to be allocated / Cost driver Allocation rate = Step 2. Assign the cost by multiplying the allocation rate by the weight of the base (cost driver) for each division Division Allocation Rate x Weight of Base Allocated Cost Total allocated cost
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