(Appendix 4B) the Thomas Corporation Has Two Service Departments and Two

question 10

Multiple Choice

(Appendix 4B) The Thomas Corporation has two service departments and two operating departments. The following data are available for a recent period:
Thomas allocates service department costs by the step-down method in the following order: Administrative Department costs are allocated first, based on number of employees; Custodial Department costs are allocated second, based on square feet occupied. No distinction is made between fixed and variable costs.
-After all allocations,the total amount of overhead cost contained in the Assembly Department will be:

• A) $152,333
• B) $168,550
• C) $150,200
• D) $155,700

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Definitions:

Financial Risk

The hazard of suffering financial loss through an investment or business endeavor.

Business Risk

encompasses the potential for a firm's operational or financial performance to suffer due to internal or external factors, impacting profitability and viability.

Absolute Priority Rule

A principle in bankruptcy proceedings that senior creditors are paid before junior creditors and equity holders.

Bankruptcy Proceeding

A legal process involving a person or business that is unable to repay outstanding debts, seeking relief through the court's protection.