Seymore Uses the Step-Down Method of Cost Allocation and Allocates

question 11

Multiple Choice

Seymore 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 Cafeteria?

• A)$88,888.
• B)$28,572.
• C)$44,444.
• D)$0.
• E)Some other amount.

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Definitions:

Debt/Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company is using its equity to create profits.

P/E Ratio

The price-to-earnings ratio, a valuation metric for assessing a company's current share price relative to its per-share earnings.

Financial Statements

Documents that report on a company's financial performance and situation, including the balance sheet, income statement, and cash flow statement.