Question

Veneer Company has two service departments and two producing departments. The number of employees in each department is: Personnel 10Cafeteria 25Producing Department A 316Producing Department B 339 690The department costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $52,440 during a given period, the amount of cost allocated to Department B under the direct method would be:$27,140.70.$0.$24,016.00.$25,764.00

Answer 1

Answer:

Correct option is $27,140.70

Explanation:

Provided information,

Provided number of employees in each department

Personnel 10

Cafeteria 25

Producing department A 316

Producing Department B 339

Department cost of personnel department = $52,440

Using direct method this will be allocated to Producing Departments only

A = 316 employees

B = 339 employees

Total = 655

Therefore cost allocated to Department B = $\frac{52,440}{655} \times 339 = 27,140.70$

Correct option is $27,140.70