What are the corporate expenses for Yozamba Technology? How are the Tech Support and Purchasing Department charges calculated? Are these charges considered controllable by the divisions?
The corporate expenses for Yozamba Technology include officers' salaries and other necessary expenses for the corporation. The Tech Support Department charges the divisions based on the number of computers in the department, while the Purchasing Department charges based on the number of purchase orders for each department. These charges are considered controllable by the divisions.
Corporate Expenses
Yozamba Technology has two divisions, Consumer and Commercial, and two corporate service departments, Tech Support and Purchasing. The corporate expenses for the year ended December 31,20Y, include officers' salaries and other expenses required by the corporation. These expenses are essential for the company's operations and are incurred to support the overall business activities.
Tech Support and Purchasing Department Charges
The Tech Support Department charges the divisions for services rendered based on the number of computers in the department, while the Purchasing Department charges divisions based on the number of purchase orders for each department. These charges are calculated according to the specific usage of services by the divisions, making them directly attributable to the activities of each division.
Controllability of Charges
The service department charges of the Tech Support Department and the Purchasing Department are considered controllable by the divisions because they are based on the direct utilization of services by each division. This means that the divisions have the ability to influence these costs through their decisions and actions related to the usage of services.
In conclusion, Yozamba Technology's corporate expenses consist of officers' salaries and necessary expenses for the corporation. The charges by the Tech Support and Purchasing Departments are calculated based on specific criteria and are considered controllable by the divisions. Understanding the allocation and controllability of these expenses is crucial for effective cost management and divisional performance evaluation.