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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
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 Information Kangaroo Platypus and design systems bank bank Direct costs $2,700 $8,000 $10,000 $20,000 Service used 0 10% 50% Engineering and design Information systems 40% 30% 20% 0 50% Using direct method, what is the information systems department cost allocated to Kangaroo bank department? O A $2,400 OB. $810 OC $3,210 OD. $3,000
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