Answer the following questions using the information below:
At the Christopher 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.

-If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A?
A)$100,000
B)$25,000
C)$0
D)$112,500

Question

Answer the following questions using the information below:
At the Christopher 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.
  
-If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A?
A)$100,000 
B)$25,000 
C)$0 
D)$112,500

Quizplus · Accepted Answer

The allocation is based on the number of employees, and Department A's share of the total employees determines its share of the costs.

Answer the Following Questions Using the Information Below