Use the Information Below to Answer the Following Question(s)

question 124

Multiple Choice

Use the information below to answer the following question(s) .Joe's Tire Company has two support departments, Personnel and Maintenance.The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used.The Personnel Department costs of $20,000 are allocated based on the number of employees.Costs of Departments A and B are $40,000 and $60,000, respectively.Data on standard service hours and number of employees are as follows:

-What is the cost of the support departments allocated to Department A using the step-down method if the Personnel Department is allocated first?

• A)$53,412
• B)$43,660
• C)$46,640
• D)$46,588
• E)$56,313

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Definitions:

Exogenous Factors

External influences that can cause changes in an economic system, outside of the system’s control.

Price Shock Theory

A theory suggesting that sudden and unexpected changes in prices (typically upwards) can have significant adverse effects on an economy.

Business Cycle

The economic cycle of expansion and contraction that occurs within an economy.

Telecommunications Industry

A sector that facilitates communication over significant distances via telephone, internet, cable, and broadcasting.