Palace Company Has Two Service Departments and Two User Departments

question 56

Multiple Choice

Palace Company has two service departments and two user departments. The number of employees in each department is:
$$\begin{array} { l r } \text { Personnel } & 10 \\\text { Cafeteria } & 25 \\\text { Producing Department A } & 265 \\\text { Producing Department B } & 250 \\&550\end{array}$$
The fixed costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $37,125 during a given period, the amount of cost allocated to the Cafeteria under the step method would be:

• A) $0.
• B) $1,718.75.
• C) $1,687.50.
• D) $1,802.18.

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