At the Christopher Company, the cost of the library and information centre has always been charged to the various departments based upon the number of employees. Recently, opinions gathered from the department managers indicated that the number of engineers might also be a predictor of personnel costs to be assigned. Total library and information costs are $150,000.

Required:
Using the above data, prepare a report that contrasts the different amounts of the library and information centre cost that would be allocated to each of the departments if the cost driver used is:
a. number of employees.
b. the number of engineers.
c. Which cost estimation method is being used by Christopher Company?

Question

At the Christopher Company, the cost of the library and information centre has always been charged to the various departments based upon the number of employees. Recently, opinions gathered from the department managers indicated that the number of engineers might also be a predictor of personnel costs to be assigned. Total library and information costs are $150,000.
  
Required:
Using the above data, prepare a report that contrasts the different amounts of the library and information centre cost that would be allocated to each of the departments if the cost driver used is:
a. number of employees.
b. the number of engineers.
c. Which cost estimation method is being used by Christopher Company?

Quizplus · Accepted Answer

The Answer of At the Christopher Company, the cost of the library and information centre has always been charged to the various departments based upon the number of employees. Recently, opinions gathered from the department managers indicated that the number of engineers might also be a predictor of personnel costs to be assigned. Total library and information costs are $150,000.
  
Required:
Using the above data, prepare a report that contrasts the different amounts of the library and information centre cost that would be allocated to each of the departments if the cost driver used is:
a. number of employees.
b. the number of engineers.
c. Which cost estimation method is being used by Christopher Company?

At the Christopher Company, the Cost of the Library and Information