Answer the Following Questions Using the Information Below

question 98

Multiple Choice

Answer the following questions using the information below:
Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:

-Using the direct method, what amount of Personnel Department costs will be allocated to Department B?

• A)$20,000
• B)$32,000
• C)$48,000
• D)$60,000

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Definitions:

Inefficiencies

Instances where resources are not used optimally, resulting in wasted or less productive outcomes.

Scarcity

is the fundamental economic problem of having seemingly unlimited human wants in a world with limited resources.

Rationed

The controlled distribution of scarce resources, goods, or services.

Market Setting

Refers to the competitive environment in which businesses operate, influenced by supply and demand dynamics.