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: The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:

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:  The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:

Quizplus · Accepted Answer

Step 1: Determine amount of Administrative to Packaging: $30,000 × 4/12 = $10,000
Step 2: Determine amount of Administrative to Maintenance: $30,000 × 2/12 = $5,000
Step 3: Packaging will be allocated 3/5 Maintenance; thus, 3/5 of the $5,000 will be allocated to Packaging: $5,000 × 3/5 = $3,000
Step 4: Total amount of Administrative to Packaging: $10,000 + $3,000 = $13,000