Blue-Pool Company is an electric utility which has two service departments, Accounting and Maintenance. It also has two operating departments, Generation and Transmission. Maintenance Department costs are allocated based on maintenance hours of service. Accounting Department costs are allocated based on accounting hours of service provided. Budgeting costs and other data for the following year are as follows: Accounting Maintenance Generation Transmission Budgeted costs R100 000 R200 000 R600 000 R400 000 Maintenance hours of service 600 7 200 4 800 Accounting hours of service 500 2 000 4 500 3 500 The step method is used to allocate service department costs, with the accounting department being allocated first. Calculate the amount of accounting department costs that needs to be allocated to the generation department. A. R42 860 B. R38 000 C. R57 143 D. R45 000
Blue-Pool Company is an electric utility which has two service departments, Accounting and Maintenance. It also has two operating departments, Generation and Transmission.
Maintenance Department costs are allocated based on maintenance hours of service.
Accounting Department costs are allocated based on accounting hours of service provided.
Budgeting costs and other data for the following year are as follows:
|
|
Accounting |
Maintenance |
Generation |
Transmission |
|
Budgeted costs |
R100 000 |
R200 000 |
R600 000 |
R400 000 |
|
Maintenance hours of service |
|
600 |
7 200 |
4 800 |
|
Accounting hours of service |
500 |
2 000 |
4 500 |
3 500 |
The step method is used to allocate service department costs, with the accounting department being allocated first.
Calculate the amount of accounting department costs that needs to be allocated to the generation department.
| A. |
R42 860 |
|
| B. |
R38 000 |
|
| C. |
R57 143 |
|
| D. |
R45 000 |
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