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White Company's production operations are organized into two support departments, (1) Human Resources and (2) Maintenance, and two production departments, (1) Assembly and (2) Finishing.
White Company's production operations are organized into two support departments, (1) Human Resources and (2) Maintenance, and two production departments, (1) Assembly and (2) Finishing. To develop departmental overhead rates, White allocates support department costs to production departments. Human Resource costs are allocated on the basis of number of employees, and maintenance costs are allocated on the basis of square feet. The number of employees and the square feet in each department are: Human Resources Maintenance Assembly Finishing Number of employees 16 32 48 Square feet 1,200 2,000 6,800 10,000 If White Company uses the direct method for allocating support department costs, the 1 percentage of the cost of the Human Resources Department that would be allocated to Assembly is 34%. 48%. None of the answers are correct. 40%. 60%
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