Question
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 |
What is the service department charge rate for the Accounting Department?
Question 19 options:
| $250 per invoice processed | |
| $714 per invoice processed | |
| $0.004 per invoice processed | |
| $625 per invoice processed |
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Practical Auditing
Authors: Ernest Evan Spicer, Ernest Charles Pegler
17th Edition
0406678014, 9780406678010
