Molten Works Ltd Provides the Following Information About Departmental Consumption

question 12

Multiple Choice

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

• A) 20%
• B) 14.3%
• C) 22.2%
• D) 30%

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Definitions:

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, often leading to a decrease in prices.

Blu-Ray Disc Rentals

The service of lending Blu-Ray discs, which contain high-definition movies or other content, to customers for a temporary period.

Rental Price

The cost paid to rent a property or equipment for a specified period of time.

Market Equilibrium

A market scenario in which the equilibrium between demand and supply results in stable prices.