Question

Veneer Company has two service departments and two producing departments. The number of employees in each department is: Personnel 10 Cafeteria 25 Producing Department A 406 Producing Department B 199 640 The department costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $43,520 during a given period, the amount of cost allocated to Department B under the direct method would be: $13,532.00. $14,314.84. $27,608.00. $0.

Answer 1

Answer:

$13,532 .00

Explanation:

The cost allocation is usually based on a measurable factor such as area occupied, number of students etc. The more the measurable factor related to a unit/department, the more the cost assigned to the departments on the basis of the size of the measurable value.

Total number of employees

= 640

the amount of cost allocated to Department B under the direct method would be

= 199/640 * $43,520

= $13,532