Bayard Backup Is a Manufacturer of Data Storage Devices How Much Maintenance Costs Will Be Allocated to the Assembly

question 85

Multiple Choice

Bayard Backup is a manufacturer of data storage devices. Bayard operates two service departments-maintenance and technology, and two production departments-assembly and testing. Maintenance costs are allocated on the basis of square footage occupied, and technology costs are allocated on the basis of the number of workstations. The following data relate to allocations of service department costs: $\begin{array}{lrr}&\text { Maintenance}&\text { Technology }&\text {Assembly }&\text {Testing }\\\hline\text { Service department costs } & \$ 400,000 & \$ 230,000 \\\text { Square footage } & 2,000 & 3,000&20,000&30,000 \\\text { Workstations } & 4 & 16&10&9\end{array}$ How much maintenance costs will be allocated to the assembly department using the direct method?

• A) $160,000
• B) $133,333
• C) $266,667
• D) $4,000

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Definitions:

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