q9

Which of the following does the value chain for a service entity include?

i. Research and Development

ii. Customer support

iii. Purchasing

iv. Design

A.

i and iv

B.

ii and iv

C.

i, ii and iv

D.

i and ii

q10

The Pingleton Company has four departments in its factory with two service departments, S1 and S2, and two production departments Assembly and Packaging. The current costs of each department are:

	Service Departments		Production Departments
S1	$350 000	Assembly	$523 000
S2	$208 000	Packaging	$416 000

The distribution and consumption of services is given in the following table:

Services provided to:
	S1	S2	Assembly	Packaging
Services provided by:
S1	-	25%	45%	30%
S2	15%	-	50%	35%

Using the direct method how much overhead cost will be allocated from S1 to Assembly:

A.

$210,000

B.

$105,000

C.

$157,500

D.

$140,000