Question
Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted
Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $350,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $150,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $250,000 and $300,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:
| Support Departments | Production Departments |
| ||
| Warehouse Department | Data Center Department | Music | Books | |
Budgeted costs | $350,000 | $150,000 | $125,000 | $150,000 | |
Budgeted warehouse-hours | NA | 500 | 1,000 | 1,500 | |
Number of computer hours | 200 | NA | 800 | 1,000 |
Using the direct method, what amount of Data Center Department costs will be allocated to Department Music?
$60,000
$66,667
$83,333
$150,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started