26.

Pederson Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows.

Cafeteria	30
Human Resources	70
Machining	300
Assembly	500

Pederson uses the direct method of cost allocation and allocates cost on the basis of employees. If Human Resources cost amounts to $1,800,000, how much of the department's cost would be allocated to Assembly? (Do not round your intermediate calculations.)

Multiple Choice

$600,000.

$675,000.

$1,125,000.

$1,080,000.

None of these.

21.

James Company has an asset that cost $7,000 and currently has accumulated depreciation of $4,000. Suppose the firm sold the asset for $2,700 and is subject to a 30% income tax rate.

The loss on disposal would be:

Multiple Choice

$210.

$300.

$390.

$2,700.

none, because the transaction produced a gain.