Koehl Corporation Uses the Direct Method to Allocate Service Department

question 57

Multiple Choice

Koehl Corporation uses the direct method to allocate service department costs to operating departments.The company has two service departments,Administrative and Facilities,and two operating departments,Assembly and Wholesaling. Administrative costs are allocated on the basis of employee hours and Facilities costs are allocated on the basis of space occupied.The total Wholesaling Department cost after the allocations of service department costs is closest to:

• A) $403,990
• B) $396,430
• C) $403,642
• D) $402,601

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Definitions:

Current Dividends

Dividends that are declared and paid to shareholders out of a company's current earnings or accumulated profits.

Future Dividends

Expected payments made by a corporation to its shareholder members based on future earnings, typically projected by the company’s management or analysts.

Target Payout Ratio

A goal set by a company to distribute a certain percentage of earnings to its shareholders in the form of dividends.

Dividend Payments

Dividend payments refer to the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.