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Westminster Manufacturing Company Has Two Support Activities and Two Line

question 36

Multiple Choice

Westminster Manufacturing Company has two support activities and two line activities. The following data pertain to usage patterns for the support and line activities: $Westminster Manufacturing Company has two support activities and two line activities. The following data pertain to usage patterns for the support and line activities: The costs of Maintenance are allocated based on square footage used. Human Resources costs are allocated based on number of employees. Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours. If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what fraction of Human Resources costs will be allocated to Activity B? A) 5/6 B) 1/4 C) 3/5 D) 1/3 E) None of the above.$ The costs of Maintenance are allocated based on square footage used. Human Resources costs are allocated based on number of employees. Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours. If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what fraction of Human Resources costs will be allocated to Activity B?

Definitions:

Machines

Devices or apparatus designed to perform a specific task, often powered by electricity or mechanical energy, to make work easier or more efficient.

Design

The process of planning and creating something with a specific purpose or intention, often involving artistic and functional considerations.

Psychiatrist

A medical doctor specialized in the diagnosis, prevention, study, and treatment of mental disorders.

M.D.

Stands for Doctor of Medicine, a degree awarded to physicians by medical schools.