AI Rawabi company consist of two support departments (Administration and R& D) and two operating departments(Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the costof R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of thesupport departments to the operating departments using direct step-dowrtHow much is the Assembling department total costafter cost allocation:Support DepartmentsOperating DepartmentsAdminR&D Manufacturing Assembling Total CostCost:Salaries30000600004400070000204000Supplies1000030000250003000095000Total400009000069000100000299000Allocation Base:Research Hours200300450250Number of Employees7109.13Select one:O a. RO 155775O b. 162090.3O c. RO 143225O d. RO 136909.7

Total Operating department number of employees = 9 + 13 = 22 Total Operating department research…

Support Departments Operating Departments R&D Manufacturing Assembling Total Cost Admin Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13

Support Departments Operating Departments R&D Manufacturing Assembling Total Cost Admin Cost: Salaries 30000 60000 44000 70000 204000 Supplies 10000 30000 25000 30000 95000 Total 40000 90000 69000 100000 299000 Allocation Base: Research Hours 200 300 450 250 Number of Employees 7 10 9. 13

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

AI Rawabi company consist of two support departments (Administration and R& D) and two operating departments
(Manufacturing & Assembling). The cost of Administration department is allocated based on number of employees and the cost
of R& D department is allocated based on research hours. The table below shows the cost details. Allocate the cost of the
support departments to the operating departments using direct step-dowrtHow much is the Assembling department total cost
after cost allocation:
Support Departments
Operating Departments
Admin
R&D Manufacturing Assembling Total Cost
Cost:
Salaries
30000
60000
44000
70000
204000
Supplies
10000
30000
25000
30000
95000
Total
40000
90000
69000
100000
299000
Allocation Base:
Research Hours
200
300
450
250
Number of Employees
7
10
9.
13
Select one:
O a. RO 155775
O b. 162090.3
O c. RO 143225
O d. RO 136909.7

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