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ABC Corporation has three service departments with the following costs and activity base: Service Department Cost Activity Base for Allocation Graphics Production $200,000 # of

ABC Corporation has three service departments with the following costs and activity base:

Service Department Cost Activity Base for Allocation
Graphics Production $200,000 # of copies
Accounting $500,000 # of invoices processed
Personnel Department $400,000 # of employees

ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:

Micro Macro Super
Direct Revenues $700,000 $850,000 $650,000
Direct Operating Expenses $50,000 $70,000 $100,000
# of copies made 20,000 30,000 50,000
# invoices processed 700 800 500
# of employees 130 145 125

How much service department cost would be allocated to the Macro Division?

$405,000

$175,000

$130,000

$305,000

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