Answer the Following Questions Using the Information Below

question 126

Multiple Choice

Answer the following questions using the information below:
Tamworth Country & Western Store has two service departments,Warehouse and Data centre.Warehouse Department costs of $200 000 are allocated on the basis of budgeted warehouse-hours.Data centre Department costs of $90 000 are allocated based on the number of computer log-on hours.The costs of operating departments Music and Books are $125 000 and $150 000,respectively.Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

-Using the step-down method,what amount of Data centre Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up. )

• A)$41 667
• B)$58 671
• C)$54 844
• D)$33 333

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Definitions:

Material Usage Variance

The difference between the actual amount of materials used in production and the standard amount expected, valued at the standard cost.

Quality Of Materials

The measure of suitability of the materials used in production, affecting the durability and functionality of the final product.

Labour Rate Variance

The difference between the actual cost of direct labor and the estimated cost based on the standard labor rate.

Standard Labour Hours

The calculated amount of labor hours predetermined to be necessary for completing a specific task or producing a certain quantity of goods.