PART A. The following data apply to questions 1-4

Billy Stone, Inc., budgets the following amounts for its Buildings & Grounds and Computer Services Departments in servicing each other and the two manufacturing divisions of Signs and Mailers:

Used By
Supplied By	Building & Grounds	Computer Services	Signs	Mailers
Buildings & Grounds		0.2	0.6	0.2
Computer Services	0.15		0.3	0.55
The actual results for the time period were as follows:
Used By
Supplied By	Building & Grounds	Computer Services	Signs	Mailers
Buildings & Grounds		0.1	0.6	0.3
Computer Services	0.25		0.35	0.4

Actual cost data for each department are:

	Fixed	Variable
Buildings & Grounds	$ 50,000	$90,000
F Computer Services	$100,000	$21,000

Total fixed costs allocated from Buildings & Grounds to the Signs Department, using the preferred allocation basis, by the direct allocation method are

a. $37,500.

b. $33,333.

c. $30,000.

d. $25,000.

e. none of the above

Total variable costs allocated from Computer Services and Building & Grounds to Mailers Department, using the preferred allocation basis, by the step-down allocation method (begin with Building & Grounds) are

a. $8,400.

b. $12,000.

c. $16,000.

d. $25,235.

e. none of the above

The equation to determine the total variable costs of Computer Services using the preferred allocation basis, for the reciprocal allocation method is

CS = $21,000 + 0.25 B&G.

CS = $21,000 + 0.20 B&G.

CS = $21,000 + 0.15 B&G.

CS = $21,000 + 0.10 B&G.

Based on the reciprocal allocation method, determine the total variable costs allocated to SIGNS using the preferred allocation basis.

PLEASE SHOW WORK