Coaster Company Has Two Service Department, Maintenance and Personnel, as Well

question 138

Multiple Choice

Coaster Company has two service department, 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: $$\begin{array} { l l l l l } \text { Maintenance } & & \text { Personnel } & \text { Mixing } & \text { Finishing } \\\text { Direct dept.costs } & \$ 50,400 & \$ 33,600 & \$ 42,000 & \$ 70,000 \\\text { Square footage } & 1,600 & 800 & 3,200 & 2,400 \\\text { Number of employees } 16 & 24 & 48 & 64\end{array}$$ If the direct method is used to allocate costs, then the cost of the Personnel Department after the Maintenance Department cost allocation would be:

• A) $33,600
• B) $38,640
• C) $39,900
• D) $63,840

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