ZanaTech has an on-site cafeteria in which it provides free meals for employees.The company allocates the cost of the cafeteria to production departments using the direct method based on the number of employees in each department.The four production departments in the company have the following number of employees: molding, 15; polishing, 20; engraving, 10; and packaging, 15.There are 20 employees in the cafeteria.The cafeteria's costs are budgeted at $144,000 for the year.What amount of cafeteria cost will be allocated to the engraving department? Use 4 significant digits for calculations.
A)$2,400
B)$24,000
C)$18,000
D)$14,400

Question

Quizplus · Accepted Answer

The total number of employees in the production departments is 15 (molding) + 20 (polishing) + 10 (engraving) + 15 (packaging) = 60. The engraving department has 10 employees out of the total 60, which is 1/6 of the total. Therefore, 1/6 of the cafeteria's costs ($144,000) will be allocated to the engraving department, which is $144,000 / 6 = $24,000.

ZanaTech Has an On-Site Cafeteria in Which It Provides Free