Use the following to answer questions:
Sovereign Credit Checks produces two styles of credit reports: Individual and Corporate. The difference between the two is the amount of background information and data collection required. The Corporate report uses more skilled personnel because additional checking and data are required. The relevant figures for the year just completed follow: Total support service costs to be allocated are $3,200,000.

-If service costs are allocated according to the number of reports, the service department cost to be allocated to the Individual report department will be:
A) $2,694,737
B) $505,263
C) $1,066,667
D) $290,909

Question

Use the following to answer questions:
Sovereign Credit Checks produces two styles of credit reports: Individual and Corporate. The difference between the two is the amount of background information and data collection required. The Corporate report uses more skilled personnel because additional checking and data are required. The relevant figures for the year just completed follow: Total support service costs to be allocated are $3,200,000.
 
-If service costs are allocated according to the number of reports, the service department cost to be allocated to the Individual report department will be:
A) $2,694,737 
B) $505,263 
C) $1,066,667 
D) $290,909

Quizplus · Accepted Answer

The service department cost to be allocated to the Individual report department is $2,694,737. This is because the service costs are allocated according to the number of reports, and the Individual report department has the highest number of reports.

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