The XYZ Manufacturing Company Has Two Support Activity Pools, Accounting

question 6

Multiple Choice

The XYZ Manufacturing Company has two support activity pools, Accounting and Human Resources. Costs for each totaled $380,000 and $190,000 respectively. 10% of the Human Resource costs are consumed by the Accounting department and 15% of the Accounting costs are consumed by the human resource department. The company uses the reciprocal method of allocating support costs. The total costs for the Accounting department which will be allocated to line activities and cost objects will be:

• A)$399,000
• B) $405,076
• C) $414,721
• D) $231,472

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Definitions:

Capital Account

An account showing the net worth of a business at a specific point in time, reflecting owners' equity and investments.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments, used to prepare financial statements.

Permanent Accounts

Accounts that are not closed at the end of the accounting year and whose balances are carried forward to the next year, including assets, liabilities, and equity accounts.

Temporary Accounts

Accounts used to accumulate data related to one accounting period, including revenue, expense, and withdrawal accounts, which are closed at the end of the period.