Goldfarb's Book and Music Store Has Two Service Departments, Warehouse

question 116

Multiple Choice

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $320,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $180,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $125,000 and $150,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:
Production
Support DepartmentsDepartments

Using the step-down method, what amount of Data Center Department cost will be allocated to the Warehouse Department if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)

• A) $62,182
• B) $180,000
• C) $24,393
• D) $0

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Definitions:

Specialized Cells

Cells that have developed unique characteristics and functions to perform specific tasks within an organism.

Sensory Neurons

Nerve cells responsible for converting external stimuli from the environment into internal electrical impulses for the brain to interpret.

Synapses

The junctions through which neurons communicate with other neurons, muscle cells, or gland cells.

Absolute Thresholds

The minimum stimulus energy needed to detect a particular stimulus 50% of the time.