Reddin Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions.

The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied.
-The total Customer Solutions Department cost after the allocations of service department costs is closest to:
A)$674,310
B)$686,040
C)$683,705
D)$686,473

Question

Reddin Corporation has two service departments, Administrative and Facilities, and two operating departments, Assembly and Customer Solutions.

The company uses the direct method to allocate service department costs to operating departments. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied.
-The total Customer Solutions Department cost after the allocations of service department costs is closest to:
A)$674,310 
B)$686,040 
C)$683,705 
D)$686,473

Quizplus · Accepted Answer

Allocation base for Administrative costs = 34,000 + 17,000 = 51,000
Allocation base for Facilities costs = 31,000 + 6,000 = 37,000
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Reddin Corporation Has Two Service Departments, Administrative and Facilities, and Two