sa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Personnel Dept. Production Dept. A Production Dept. B Standard service hours used 200 200 240 160 Number of employees 10 20 40 120
sa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Personnel Dept. Production Dept. A Production Dept. B Standard service hours used 200 200 240 160 Number of employees 10 20 40 120
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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8.
Lisa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.
Data on standard service hours and number of employees are as follows:
|
|
Maintenance Dept. |
Personnel Dept. |
Production Dept. A |
Production Dept. B |
|---|---|---|---|---|
|
Standard service hours used |
200 |
200 |
240 |
160 |
|
Number of employees |
10 |
20 |
40 |
120 |
How much of the cost of the Maintenance Department is allocated to Department B using the direct method?
Select one:
a. $60,000
b. $32,000
c. $12,800
d. $24,000
e. $16,000
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