A Company Has Two Departments, Y and Z That Incur

question 29

Multiple Choice

A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $19,000 indicates that Dept. Y had a direct wage expense of $2,000 and Dept. Z had a direct wage expense of $3,500. The remaining expenses are indirect and analysis indicates they should be allocated evenly between the two departments. Departmental wage expenses for Dept. Y and Dept. Z, respectively, are:

• A) $9,500; $9,500.
• B) $6,750; $6,750.
• C) $8,750; $10,250.
• D) $10,250; $8,750.
• E) $2,000; $3,500.

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Definitions:

Advertising

The act or job of creating promotional material for commercial goods or services.

Advertising

The action of calling public attention to products, services, needs, etc., especially by paid announcements in newspapers and magazines, over the radio or television, on billboards, etc.

Long-run Equilibrium

The state in which all inputs are variable, allowing firms to make adjustments and the market to clear.

Efficient Scale

The level of production at which average total costs are minimized.