Flamingos, Inc. has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows: $$\begin{array} { l | r | r | r | r }
& \text { Admin } & \text { Maintenance } & \text { Assembly } & \text { Packaging } \
\hline \text { Operating costs } & \$ 30,000 & \$ 15,000 & \$ 70,000 & \$ 45,000 \
\text { No. of employees } & & 2 & 6 & 4 \
\text { Sq. ft. of space } & & & 2,000 & 3,000
\end{array}$$ The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:
A) $10,000.
B) $12,000.
C) $18,000.
D) $4,800.
E) $13,000.

Question

Flamingos, Inc. has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows: $$\begin{array} { l | r | r | r | r } 
& \text { Admin } & \text { Maintenance } & \text { Assembly } & \text { Packaging } \
\hline \text { Operating costs } & \$ 30,000 & \$ 15,000 & \$ 70,000 & \$ 45,000 \
\text { No. of employees } & & 2 & 6 & 4 \
\text { Sq. ft. of space } & & & 2,000 & 3,000
\end{array}$$ The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:
A) $10,000.
B) $12,000.
C) $18,000.
D) $4,800.
E) $13,000.

Quizplus · Accepted Answer

To allocate Administrative Department costs to the Packaging Department, we need to use the number of employees in each department. 
Total number of employees in all departments = 400 
Number of employees in the Packaging Department = 80 
Percentage of employees in the Packaging Department = 80/400 = 20% 
Total Administrative Department costs = $65,000 
Amount allocated to the Packaging Department = 20% of $65,000 = $13,000. 
Therefore, the correct answer is E: $13,000.

Flamingos, Inc The Total Amount of the Administrative Department's Cost That Would