Westminster Manufacturing Company Has Two Support Activities and Two Line

question 9

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: 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 amount of Human Resources costs will be allocated to Activity A?

• A) $8,000
• B) $9,454
• C) $20,000
• D) $4,545
• E) None of the above.

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Definitions:

Telephone Selling

The process of engaging potential customers through phone calls with the aim of promoting products or services and securing sales.

Core Principles

Fundamental beliefs or values that serve as the foundation for an organization, individual's actions, or the functioning of a system.

Professional Selling

The activity or profession of selling products or services in a manner that upholds high standards of business ethics, customer service, and product knowledge.

Need-Satisfaction Presentation

A flexible, interactive type of presentation in which a prospect’s needs are thoroughly discussed.