Question
Viru-phonic, a manufacturer of virus elimination software for the CD recording industry, has two production departments (Bigdisk and Littledisk) and two service departments (Calibration and
Viru-phonic, a manufacturer of virus elimination software for the CD recording industry, has two production departments (Bigdisk and Littledisk) and two service departments (Calibration and Inspection). Calibration costs are allocated on the basis of the number of pressing machines in each department. Inspection costs are allocated on the basis of number of shifts worked in a production department per normal day. Bigdisk has 4 pressing machines and Littledisk has 4 pressing machines. Calibrations cost to be allocated is $100,000. Inspections departmental cost prior to allocation is $200,000.
If the DIRECT method of cost allocation is used, how much of the Calibration departments costs should be allocated to Bigdisk?
A.$33,333.34 | ||
B.$25,000.00 | ||
C.$40,000.00 | ||
D.$80,000.00 | ||
E.$50,000.00 Please show work |
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