VelCraft Allocates Costs from Its Payroll Department and the Maintenance

question 16

Multiple Choice

VelCraft allocates costs from its payroll department and the maintenance department to its production departments using the direct method of allocation.Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet that the production department occupies within the factory.Information about the departments is presented below: $\begin{array}{lrrr}&&\text { Number of } & \text { Number of Square } \\\text { Department } & \text { Costs } &\text { Emplovees }&\text { feet Occupied }\\\text { Payroll } & \$ 150,000 & 2 & 2,000 \\\text { Maintenance } & \$ 220,000 & 8 & 64,000 \\\text { Molding } & & 75 & 100,000 \\\text { Finishing } & & 50 & 60,000 \\\text { Packaging } & & 25 & 40,000\end{array}$ When the payroll department costs are allocated, what is the amount per employee that will be charged to each of the departments?

• A)$937.50
• B)$15,000
• C)$6.67
• D)$1,000

Understand the concept of piercing the corporate veil and the circumstances under which it may occur.

Familiarize with the terms and legal implications surrounding non-profit corporations and their uniqueness.

Understand the typical terms and conditions under which corporate directors serve.

Grasp the concept of quorum requirements for director meetings.

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Definitions:

Payroll Office

The department within an organization that is responsible for processing employee paychecks, withholding taxes, and maintaining financial records related to employment.

Human Resources

The department within an organization responsible for managing employee-related processes, including recruitment, training, and payroll.

Accounting and Finance

The area concerned with the management of funds and monetary transactions within an organization.

Outsourcing

The practice of hiring external firms or individuals to perform tasks, handle operations or provide services for an organization.