Ransall Auto Parts Has Two Service Departments-Maintenance and Personnel, and Three

question 81

Multiple Choice

Ransall Auto Parts has two service departments-maintenance and personnel, and three production departments-fabrication, assembly, and packaging.Service costs are allocated to producing departments using the direct method.Information on overhead in each department and possible allocation bases appear below: $\begin{array}{lrrrrr}&\text { Maintenance}&\text { Personnel }&\text {fabrication }&\text {Assembly }&\text {Packaging }\\\text { Cost } & \$ 90,000 & \$ 130,000 & & & \\\text { Machine hours } & & & 12,000 & 30,000 & 18,000 \\\text { Employees } & 4 & 16 & 24 & 30 & 26\end{array}$ Using the most logical activity base, how much personnel cost will be allocated to the packaging department?

• A)$7,150
• B)$39,000
• C)$33,800
• D)$42,250

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Definitions:

Business Projects

Specified endeavors undertaken by businesses to achieve specific objectives, often within a set timeline and budget.

Private Owners

Individuals or entities who own private property or businesses and have control over their use and distribution.

Damages

Compensation claimed by or awarded to a person for injury or loss due to a breach of contract, negligence, or other unlawful act.

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Legal rights over the use, control, and benefits of ownership for property, including real, personal, and intellectual property.