City Company Has Two Service Departments, Maintenance and Personnel, as Well

question 107

Multiple Choice

City Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:

-If the direct method is used to allocate costs, the total cost of the Mixing Department after allocation would be

• A) $30,429.
• B) $10,286.
• C) $5,143.
• D) $15,000.

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Definitions:

Reputational Risk

The potential for loss resulting from damages to a firm's reputation, which can affect its business operations and financial performance.

Valuation Risk

The risk of loss associated with inaccuracies or variations in the valuation of assets, liabilities, or financial instruments.

State-Owned Enterprise

A business entity that is owned and operated by the government to provide goods or services to the public.

Limited Liability Company

A business structure in the United States that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.