Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

If administrative expense of $62,800.00 is allocated on the basis of number of employees, the cost per cost driver rate would be ________.
A) $433.10
B) $314.00
C) $1,141.82
D) $46.18

Question

Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

If administrative expense of $62,800.00 is allocated on the basis of number of employees, the cost per cost driver rate would be ________.
A) $433.10 
B) $314.00 
C) $1,141.82 
D) $46.18

Quizplus · Accepted Answer

Cost per cost driver rate = $62,800.00 ÷ (145 + 55) = $314.00

Stark Corporation Has Two Departments, Car Rental and Truck Rental