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mariarad [96]
3 years ago
11

Marshall Welding Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining a

nd Assembly). The number of employees in each department follows. Cafeteria 20 Human Resources 30 Machining 100 Assembly 150 Marshall Welding uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources cost would be allocated to Cafeteria
Business
1 answer:
vovikov84 [41]3 years ago
5 0

Answer: $88,889

Explanation:

Based on the information given in the question, the cost of Human Resources that would be allocated to Cafeteria will be calculated thus:

Number of employees (Human Resources to departments)

= 20 + 100 + 150

= 270 employees

The Human Resources cost would be allocated to Cafeteria will be:

= $1,200,000 / 270 x 20

= $88,889

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