The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows: The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests.
-Assume Grand uses the direct allocation method.After all allocations,how much of the company's total overhead cost will be charged to the Production Department for the coming year?
A)$43,400
B)$46,200
C)$45,941
D)$41,728

Question

The Grand Company has budgeted departmental costs and operating activity in its four departments for the coming year as follows:  The company does not distinguish between fixed and variable service department costs. Custodial costs are allocated on the basis of square feet occupied. Repair costs are allocated on the basis of the number of repair requests.
-Assume Grand uses the direct allocation method.After all allocations,how much of the company's total overhead cost will be charged to the Production Department for the coming year?
A)$43,400 
B)$46,200 
C)$45,941 
D)$41,728

Quizplus · Accepted Answer

Allocation base for Custodial costs = 1,200 + 3,600 = 4,800
Allocation base for Repair costs = 220 + 100 = 320
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The Grand Company Has Budgeted Departmental Costs and Operating Activity