Use the Following Information to Answer the Following Questions

question 24

Multiple Choice

Use the following information to answer the following Questions
Marshall Welding Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly) . The number of employees in each department follows.

-Marshall Welding uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources cost would be allocated to Machining?

• A) $0.
• B) $428,572.
• C) $444,444.
• D) $480,000.
• E) None of the answers is correct.

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Definitions:

Target Cost

The desired cost of a product derived from subtracting the desired profit margin from the competitive market price.

Profit Requirement

The minimum level of earnings necessary for a business to sustain its operations or fulfill its financial goals.

Profit Mark-Up

The percentage added to the cost of goods to arrive at the selling price.

Target Selling Prices

The intended price at which a company aims to sell its products, often determined by market conditions and cost considerations.