Rave Reviews Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. Cafeteria 40 Human Resources 60 Machining 200 Assembly 500 Rave Reviews uses the direct method of cost allocation and allocates cost on the basis of employees. If Human Resources cost amounts to $1,820, 000, how much of the department's cost would be allocated to Machining? (Do not round your intermediate calculations.) Multiple Choice $364, 000. $520,000. $910, 000. $728, 000. None of the answers is correct.

Rave Reviews Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. Cafeteria 40 Human Resources 60 Machining 200 Assembly 500 Rave Reviews uses the direct method of cost allocation and allocates cost on the basis of employees. If Human Resources cost amounts to $1,820, 000, how much of the department's cost would be allocated to Machining? (Do not round your intermediate calculations.) Multiple Choice $364, 000. $520,000. $910, 000. $728, 000. None of the answers is correct.

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Rave Reviews Company has two service departments (Cafeteria and Human Resources) and
two production departments (Machining and Assembly). The number of employees in each
department follows. Cafeteria 40 Human Resources 60 Machining 200 Assembly 500 Rave
Reviews uses the direct method of cost allocation and allocates cost on the basis of
employees. If Human Resources cost amounts to $1,820, 000, how much of the department's
cost would be allocated to Machining? (Do not round your intermediate calculations.) Multiple
Choice $364, 000. $520,000. $910, 000. $728, 000. None of the answers is correct.

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