### Allocation of Departmental Costs#### Overview:An organization has four departments: two service departments (General Management and Physical Plant) and two operating departments (Sales and After-Sales). Below is a breakdown of the relevant data for these departments.#### Departmental Data:| | Service Department | Operating Department ||---------------------|------------------------------------|---------------------------|| | General Management | Physical Plant | Sales | After-Sales || **Departmental costs** ($) | 33,384 | 68,070 | 232,830 | 292,500 || **Employee time** (hours) | 6,000 | 5,000 | 40,000 | 33,000 || **Space occupied** (sq ft) | 10,000 | 5,000 | 40,000 | 28,000 |#### Allocation Details:- **General Management Department costs** are allocated first based on the basis of employee time.- **Physical Plant Department costs** are allocated second based on the basis of space occupied.#### Question:After performing the allocations, determine the total cost for the After-Sales Department. The closest value to the total After-Sales Department cost after allocations is:#### Multiple Choice Answers:- $321,410- $332,888- $335,534- $335,670By understanding how to allocate costs based on given bases like employee time and space occupied, one can distribute service department costs to operating departments to accurately reflect their use of resources.

Cost allocation refers to the process of appointing the desired form of expenses or cost to their…

Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: Service Department General Physical Plant Operating Department Sales After-Sales Management $ 33,384 $ 68,070 6,000 10,000 $ 232,830 $ 292,500 Departmental costs Employee time Space occupied 5,000 5,000 40,000 40,000 33,000 28,000 General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the bas total After-Sales Department cost after allocations is closest to: Multiple Choice $321,410 $332,888

Physical Plant, and two operating departments, Sales and After-Sales. Data concerning those departments follow: Service Department General Physical Plant Operating Department Sales After-Sales Management $ 33,384 $ 68,070 6,000 10,000 $ 232,830 $ 292,500 Departmental costs Employee time Space occupied 5,000 5,000 40,000 40,000 33,000 28,000 General Management Department costs are allocated first on the basis of employee time and Physical Plant Department costs are allocated second on the bas total After-Sales Department cost after allocations is closest to: Multiple Choice $321,410 $332,888

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 5-6. ALLOCATION OF SERVICE DEPARTMENT COSTS
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