Molten Works Ltd Provides the Following Information About Departmental Consumption

question 33

Multiple Choice

Molten Works Ltd provides the following information about departmental consumption of allocation bases for its 3 support and 2 operating departments. $$\begin{array} { | l | c | c | c | c | c | } \hline & { \text { Support Departments } } &&& { \text { Operating Departments } } \\\hline & \text { Persennel } & \text { Cafeteria } & \text { Maintenance } & \text { Machining } & \text { Assenbly } \\\hline \text { Maintenance } & & 10 \% & 20 \% & 30 \% & 40 \% \\\hline \text { Cafeteria } & 10 \% & & 20 \% & 40 \% & 30 \% \\\hline \text { Personnel } & 10 \% & 20 \% & & 50 \% & 20 \% \\\hline\end{array}$$ For the step-down method, what proportion of the Maintenance Department's costs will be allocated to the Assembly Department if the allocation order is Personnel, Cafeteria and Maintenance?

• A) 60%
• B)40%
• C) 57.1%
• D) 42.9%

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Definitions:

Treasury Stock

Shares that were once a part of the outstanding shares of a company but were bought back and are held by the company itself.

Cost Method

An accounting method used to value inventory or investments at their original cost.

Par Value

A nominal value assigned to shares of stock, which may not reflect the actual market value.

Stock Split

A stock split is a corporate action where a company divides its existing shares into multiple shares to boost liquidity, though the overall market capitalization remains unchanged.