White Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: The total cost of operating the Milling Department for the current period is:
A) $14,280.
B) $15,912.
C) $76,500.
D) $90,780.
E) $92,412.

Question

Quizplus · Accepted Answer

The total cost of operating the Milling Department includes its direct costs plus the allocated costs from the service departments (Payroll and Maintenance). Without the specific operating data provided in the question, we can't calculate the exact figures. However, the correct process involves adding the direct costs of the Milling Department to the allocated portions of the Payroll and Maintenance Department costs based on the given allocation bases (number of employees and floor space, respectively). The correct answer would be the result of this calculation, which, based on the options provided, is assumed to be $92,412.

White Company Has Two Service Departments and Two Operating (Production)