Kovacik manufactures two types of piggy banks, a kangaroo-shaped piggy bank and a platypus-shaped piggy bank, in
Question:
Kovacik manufactures two types of piggy banks, a kangaroo-shaped piggy bank and a platypus-shaped piggy bank, in two separate production departments. The plant is highly automated and contains only two other support departments: (1) engineering and design; and (2) information systems. Kovacik allocates support department costs according to estimated service use. Information for the year just ended was as follows.
| Support | Production | ||
| Engineering and design | Information systems | Kangaroo bank | Platypus bank |
Direct costs | $2,700 | $8,000 | $10,000 | $20,000 |
Service used |
|
|
|
|
Engineering and design | 0 | 10% | 40% | 50% |
Information systems | 20% | 0 | 30% | 50% |
Using step down method, what is the Engineering and design department cost allocated to Platypus bank department (to the nearest dollar)?
A.
$1,911
B.
$1,500
C.
$2,389
D.
$2,150
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr