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:

Mature Foreign Films

Movies from countries other than one's own that are intended for an adult audience, often dealing with complex themes and situations.

Residuals

Royalties paid by contract to actors when their filmed work is aired on television or digital medium or when their television work is rerun or shown in syndication.

Negotiating Tool

A method or resource employed during negotiations to persuade or influence the outcome in one's favor.

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Emerging or contemporary types of media that utilize digital technology to deliver content, including social media, websites, digital art, and virtual reality experiences.