Steve Company Has Two Service Departments, Maintenance and Personnel, as Well

question 134

Multiple Choice

Steve Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: $\begin{array}{lllll}&\text { Maintenance }&\text { Personnel }&\text { Mixing }&\text { Finishing }\\\text { Direct dept.costs }&\$126,000&\$105,000&\$175,000&\$84,000\\\text { Square footage } & 800 & 400 & 1,600 & 1,200 \\\text { Number of employees } &8 & 12 & 24 & 32\end{array}$ If the direct method is used to allocate costs, the total cost of the Finishing Department after allocation would be:

• A) $54,000
• B) $277,000
• C) $48,000
• D) $175,000

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Definitions:

Opium Of The People

A term used by Karl Marx, metaphorically describing religion's effect on people as a soothing but illusionary escape from their distress.

Marx

A reference to Karl Marx, a 19th-century philosopher, economist, and revolutionary known for his critical analysis of capitalism and his influence on socialist thought.

Ecclesia

A state church or an organized religion that is closely integrated with the political and social structure of a society, often holding significant influence.

State Supported Churches

Churches that receive financial and political backing from the government.