Ready Company Has Two Operating (Production) Departments: Assembly and Painting

question 191

Multiple Choice

Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration $ 80,000
Maintenance $ 100,000
-
Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The amount of administration expenses that should be allocated to the Painting Department for the current period is:

• A) $ 48,000.
• B) $ 32,000.
• C) $ 55,000.
• D) $103,000.
• E) $110,000.

---

Definitions:

Orally Agree

To come to a mutual decision or arrangement through spoken words rather than written documents.

Contract Rescission

The legal act of canceling a contract and returning the parties involved to their positions before the contract was signed.

Mistake Of Value

A legal concept referring to an error made by one or both parties at the time of contract formation, concerning the value of the goods or services to be exchanged.

European Courts

Judicial institutions operating within Europe, including both national courts of individual sovereign countries and transnational courts such as the European Court of Justice.