At the Wild Cat Group Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.
Total library and information center costs are $215,000.

If the number of engineers is considered the cost driver, what amount of library and information center costs will be allocated to Department A? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar.)
A) $40,524
B) $45,331
C) $8,600
D) $130,813

Question

At the Wild Cat Group Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.
Total library and information center costs are $215,000.

If the number of engineers is considered the cost driver, what amount of library and information center costs will be allocated to Department A? (Round any intermediary calculations two decimal places and your final answer to the nearest dollar.)
A) $40,524 
B) $45,331 
C) $8,600 
D) $130,813

Quizplus · Accepted Answer

5 / (5 + 85 + 35) = 0.04
0.04 x $215,000 = $8,600

At the Wild Cat Group Company, the Cost of the Library