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Jamison Company Has Two Service Departments and Two Producing Departments

Question 26

Multiple Choice

Jamison Company has two service departments and two producing departments. Square footage of space occupied by each department follows:
 Custodial services 1,000feet General administration 3,000feet Producing Department A 8,000feet Producing Department B 8,000feet20,000feet\begin{array}{lr}\text { Custodial services } & 1,000 \mathrm{feet} \\\text { General administration } & 3,000 \mathrm{feet} \\\text { Producing Department A } & 8,000 \mathrm{feet} \\\text { Producing Department B } &\underline{ 8,000 \mathrm{feet} }\\ &\underline{ 20,000 \mathrm{feet}}\end{array}
The department costs of Custodial Services are allocated on a basis of square footage of space. If Custodial Services costs are budgeted at $38,000, the amount of cost allocated to General Administration under the direct method would be:


A) $0.
B) $7,125.
C) $6,000.
D) $5,700.

Correct Answer:

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