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Moneybaggs Financial Advisors the DIRECT method to allocate service department costs to the departments managing customer accounts. The costs of the Information Technology department are
Moneybaggs Financial Advisors the DIRECT method to allocate service department costs to the departments managing customer accounts. The costs of the Information Technology department are allocated based on number of computers. The costs of the Accounting department are allocated based on revenue generated. Information about the departments and costs are as follows: Computers Revenue ($000s) 7 Information Technology Accounting Individual Accounts Department cost $ 250,000 140,000 630,000 8 24 $ 760,000 Commercial Accounts 897,000 66 1,280,000 How much cost would Moneybaggs allocated from the INFORMATION TECHNOLOGY department to the COMMERCIAL ACCOUNTS department? You may round your calculations differently than I rounded mine. Select the answer which is closest to your calculations. O A) $168,367 B) $157,143 C) $196,572 D) $183,333
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