The James Company Has Four Departments with Data as Follows

question 72

Multiple Choice

The James Company has four departments with data as follows:
$\begin{array} { | l | r | r | r | r | } \hline & { \text { Service Departments } } && \text { Operating Departments } \\\hline & \text { Cafeteria } & \text { Maintenance } & \text { Milling } & \text { Finishing } \\\hline \text { Budgeted Costs } & \$ 12,000 & \$ 10,000 & \$ 42,000 & \$ 38,000 \\\hline \text { Number of Employees } & 12 & 10 & 84 & 66 \\\hline \text { Labour Hours } & 1,500 & 1,250 & 5,250 & 4,750 \\\hline\end{array}$

- Suppose Maintenance Department costs are allocated on the basis of labour hours.What would be the amount of cost allocated to Milling from Maintenance under the direct method?

• A) $5,250.
• B) $5,600.
• C) $5,700.
• D) $6,720.

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