Question 25

Singer Corporation

Singer Corporation has three production departments Q, R, and T. Singer Corporation also has two service departments, IT and Human Resources. IT costs are allocated based on value of assets employed, and Human Resources costs are allocated based on number of employees. Assume that IT provides more service to the other departments than does the Human Resources Department.

Dept. Direct Costs Employees Asset Value

IT $900,000 25 $450,000

Human Resouces 350,000 10 600,000

Q 700,000 15 300,000

R 200,000 5 150,000

T 250,000 10 800,000

Refer to SInger Corporation. Using the step method, what amount of IT costs is allocated toR (round to the nearest dollar)?

a. $72,973

b. $389,189

c. $291,892

d. $145,946