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.The actual cafeteria costs totaled $147,000 for the year.What is the total amount of the cafeteria's costs that will be allocated to the production departments?
A)$108,000
B)$144,000
C)$147,000
D)None of these answer choices are correct.

Question

Quizplus · Accepted Answer

The total amount of the cafeteria's costs that will be allocated to the production departments is the budgeted amount of $144,000. The actual costs are not relevant for the allocation process in this scenario, as the allocation is based on the budgeted costs.

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