Dickson Company has two production departments and two support departments. Each department occupies the following square footage: Housekeeping department costs are allocated on the basis of the square footage of space. If the budget for housekeeping costs is $45,000, what amount would be allocated to Administration using the direct method to allocate costs?
A)$0.
B)$4,821.
C)$8,036.
D)$16,875.

Question

Dickson Company has two production departments and two support departments. Each department occupies the following square footage:  Housekeeping department costs are allocated on the basis of the square footage of space. If the budget for housekeeping costs is $45,000, what amount would be allocated to Administration using the direct method to allocate costs?
A)$0. 
B)$4,821. 
C)$8,036. 
D)$16,875.

Quizplus · Accepted Answer

$0 - using the direct method, no allocation between service departments occur

Dickson Company Has Two Production Departments and Two Support Departments