Answer the Following Questions Using the Information Below:
Hanung Corp

question 135

Multiple Choice

Answer the following questions using the information below:
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $100,000 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:
$\begin{array}{|l|c|c|c|c|}\hline&\text { Support Departments }&&\text { Production }\\&&&\text { Departments }\\\hline& \begin{array}{c}\text { Maintenance } \\\text { Department }\end{array} & \begin{array}{c}\text { Personnel } \\\text { Department }\end{array} & \text { A } & \text { B } \\\hline\text { Budgeted costs } & \$ 300,000 & \$ 100,000 & \$ 160,000 & \$ 240,000 \\\hline \text { hudgeted maintenance- } & \text { NA } & 800 & 1,200 & 600 \\\text { hours }\\\hline \text { Number of employees } & 50 & \text { NA } & 200 & 600\\\hline\end{array}$
-Using the direct method,what amount of Maintenance Department costs will be allocated to Department B?

• A) $96,000
• B) $100,000
• C) $110,000
• D) $122,000

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Definitions:

Total Stockholders' Equity

The total amount of funds contributed by shareholders and retained earnings within a company.

Total Liabilities

The total of all financial obligations owed by a business to creditors, including loans, accounts payable, and other debts.

Retained Earnings

The portion of a company's profits that are not distributed as dividends to shareholders but are kept by the company for reinvestment.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.