Question
A firm has two production departments: Department X and Department Y. Both production departments are supported by two service departments: Department A (i.e. the power
A firm has two production departments: Department X and Department Y. Both production departments are supported by two service departments: Department A (i.e. the power department) and Department B (i.e. the maintenance department). Departments A and B also consume service from one another. The work done by Departments A and B is summarized in the table below (work by Department A is in kilowatt-hours; work by Department B is in labor hours). Work Consumed By Work Provided By A B X Y Department A (Power) 0 100 250 150 Department B (Maintenance) 200 0 80 120 Costs of Department A are $400,000, and costs for Department B are $100,000. What percentage of overall kilowatt-hours from the power department are consumed by the maintenance department? a. 100% b. 25% c. 20% d. 50%
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