At the Wild Cat Group Company, the Cost of the Library

question 134

Multiple Choice

At the Wild Cat Group Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.
Total library and information center costs are $213,000.

If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

• A) $42,377
• B) $44,730
• C) $20,286
• D) $130,306

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Definitions:

Business Judgment Rule

A legal principle that shields corporate directors, under certain conditions, from liability for decisions that harm the company if the decisions were made in good faith and with due diligence.

Fiduciaries

Individuals or entities that hold a legal or ethical relationship of trust with one or more parties, often in financial matters.

Shareholder Approval

A process in which shareholders vote on key corporate actions or decisions, often required for mergers, acquisitions, and other significant matters.

Liability of Directors

Legal responsibility held by company directors for actions or decisions made in the course of carrying out their duties.