Question 38(1 point)

Reference: 11-10

Westmore Company has two Service Departments and two Operating Departments. Budgeted costs and other data relating to these departments are presented below:

Building Personnel Operating Operating

& Grounds A B

Departmental costs $54,000 $200,000 $650,000 $800,000

Square Metres Occupied 1,000 3,000 12,000 15,000

Number of Employees 10 5 45 55

Direct Labour Hours 76,000 92,000

The costs of Building & Grounds are allocated first on the basis of square metres of space occupied. Personnel costs are allocated on the basis of number of employees. The departmental costs for the Operating Departments are overhead costs. Predetermined overhead rates in the Operating Departments are calculated on the basis of direct labour hours.

(Appendix 11A) Assume that the company uses the direct method of allocating Service Department costs to Operating Departments. How much Building & Grounds cost would be allocated to Operating Department A?

Question 38 options:

A)

$21,600.

B)

$20,903.

C)

$29,700.

D)

$24,000.