Answer the following questions using the information below:
Tamworth Country & Western Store has two service departments,Warehouse and Data centre.Warehouse Department costs of $200 000 are allocated on the basis of budgeted warehouse-hours.Data centre Department costs of $90 000 are allocated based on the number of computer log-on hours.The costs of operating departments Music and Books are $125 000 and $150 000,respectively.Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

-Using the direct method,what amount of Data centre Department costs will be allocated to Department Music?

Question

Answer the following questions using the information below:
Tamworth Country & Western Store has two service departments,Warehouse and Data centre.Warehouse Department costs of $200 000 are allocated on the basis of budgeted warehouse-hours.Data centre Department costs of $90 000 are allocated based on the number of computer log-on hours.The costs of operating departments Music and Books are $125 000 and $150 000,respectively.Data on budgeted warehouse-hours and number of computer log-on hours are as follows:
 
-Using the direct method,what amount of Data centre Department costs will be allocated to Department Music?

Quizplus · Accepted Answer

The direct method allocates service department costs directly to operating departments based on a chosen allocation base. If $40,000 is the amount allocated to the Music Department, it is the correct allocation based on the given method and data.

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