Answer the Following Questions Using the Information Below

question 175

Multiple Choice

Answer the following questions using the information below:
At the Christopher Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.

-If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A?

• A)$100,000
• B)$25,000
• C)$0
• D)$112,500

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Definitions:

Retained Earnings

Profits that a company keeps or reinvests rather than distributing to shareholders as dividends.

Cash Available

The total amount of cash or liquid funds a company or individual has accessible for immediate use.

Stock Dividend

A distribution by a company to its shareholders through the issuance of extra shares instead of monetary compensation.

Sufficient Cash

Adequate monetary resources available to a business for meeting immediate and short-term obligations.