Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Information Technology Department cost allocated to the two operating departments is closest to:
A) $13,027
B) $33,334
C) $20,667
D) $151,158

Question

Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization.  Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Information Technology Department cost allocated to the two operating departments is closest to:
A) $13,027 
B) $33,334 
C) $20,667 
D) $151,158

Quizplus · Accepted Answer

The Answer of Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization.  Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Information Technology Department cost allocated to the two operating departments is closest to:
A) $13,027 
B) $33,334 
C) $20,667 
D) $151,158

Ockey Corporation Uses the Direct Method to Allocate Service Department