Ockey Corporation Uses the Direct Method to Allocate Service Department

question 351

Multiple Choice

Ockey Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total Fabrication Department cost after service department allocations is closest to:

• A) $270,110
• B) $277,969
• C) $280,623
• D) $274,308

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Definitions:

Accounting

The systematic process of recording, analyzing, and interpreting financial information.