Question
Fact pattern: Gemini Inc., has two service departments (the Systems Department and the Facilities Department) that provide support to the companys three production departments (Machining
Fact pattern: Gemini Inc., has two service departments (the Systems Department and the Facilities Department) that provide support to the companys three production departments (Machining Department, Assembly Department, and Finishing Department). The overhead costs of the Systems Department are allocated to other departments on the basis of computer usage hours. The overhead costs of the Facilities Department are allocated based on square feet occupied (in thousands). Other information pertaining to Logo is as follows: | |||||||
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Computer | Square Feet |
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Department | Overhead | Usage Hours | Occupied |
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Systems | $120,000 | 350 | 1,750 |
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Facilities | 24,000 | 1,050 | 1,050 |
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Machining | 240,000 | 4,200 | 3,500 |
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Assembly | 330,000 | 2,100 | 5,250 |
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Finishing | 372,000 | 3,150 | 8,750 |
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Total | 10,850 | 20,300 |
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Logo employs the direct method of allocating service department costs. The overhead of the Systems Department would be allocated by dividing the overhead amount by | |||||||
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A | 1,400 hours |
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B | 10,500 hours |
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C | 9,450 hours |
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D | 10,850 hours |
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How much of the Facilities overhead would the Assembly Department receive? |
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A | $7,200 |
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B | $6,207 |
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C | $5,333 |
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D | $6,545 |
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