Question
. A company has three service departments and two producing departments. The three service departments with their cost are accounting ($30,000), human resources ($40,000) and
. A company has three service departments and two producing departments. The three service departments with their cost are accounting ($30,000), human resources ($40,000) and custodial ($100,000). The two producing departments are welding ($300,000) and assembly ($250,000). Accounting costs are allocated based on number of employees, human resources is allocated based on number of full-time employees employed, and custodial is allocated based on square footage. The following is available for the company:
Accounting Human Resources Custodial Welding Assembly Total
# of employees 12 15 22 140 130 319
# of full-time employees 9 14 15 66 90 194
square footage 2,000 3,000 1,500 60,000 70,000 136,500
Assuming the company uses the step down allocation method in allocating service costs to producing departments, Welding would have total costs allocated to its department from service departments and its own costs totalling:
A. $360,000
B. $378,814
C. $341,186
D. $378,633
E. Some other amount _____________
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