Using the direct method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments. The total amount of costs allocated to Assembly from the Custodial Department and Accounting Department is
A)$27,902.
B)$28,585.
C)$34,583.
D)$37,985.

Question

Using the direct method, Natasha allocates Custodial Department costs based on square footage serviced and budgets $25,000 for the coming period. She allocates Accounting Department costs based on the number of employees served and is budgeting $105,000 for the next period. She shows the following information about the two service departments and two production departments.  The total amount of costs allocated to Assembly from the Custodial Department and Accounting Department is
A)$27,902. 
B)$28,585. 
C)$34,583. 
D)$37,985.

Quizplus · Accepted Answer

8,000 + 4,000 = 12,000 
4,000 ÷ 12,000 x $25,000 = $8,333 
120 + 40 = 160 
40 ÷ 160 x $105,000 = $26,250 
$8,333 + $26,250 = $34,583 
Mach sq ft + Assm sq ft = total sq ft 
Assm sq ft ÷ total sq ft x cust costs = cust alloc costs 
Mach empl + Assm emply = total empl 
Assm empl ÷ total empl x acct costs = acct alloc costs 
Cust alloc costs + acct alloc costs = total alloc costs

Using the Direct Method, Natasha Allocates Custodial Department Costs Based