Question
The administrative office of Valencia Community College has organized the school training programs into three departments. Each department provides training in a different area as
The administrative office of Valencia Community College has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant, dental hygiene, and office technology. The schools president, Sandy Shugart, wants to know how much it costs to operate each of the three departments. To accumulate the total cost for each department, the accountant has identified several indirect costs that must be allocated to each. These costs are $62,000 of phone expense, $1,835 of office supplies, $125,000 of office rent, and $48,000 of janitorial services. To provide a reasonably accurate allocation of costs, the accountant has identified several cost drivers. These drivers and their association with each department follow.
Cost Driver | Dept 1 | Dept 2 | Dept 3 |
Number of telephones | 5 | 8 | 7 |
Number of faculty members | 5 | 4 | 3 |
Square footage of office space | 11,000 | 6,000 | 4,000 |
Based on the above, identify the allocation rate for telephone expense.
Multiple Choice
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$20,667
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$4,429
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$3,100
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$5,167
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