Answer the Following Questions Using the Information Below:
Alfred, Owner $\text { Budgeted manufacturing overhead costs }$

question 146

Multiple Choice

Answer the following questions using the information below:
Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis:
$\text { Budgeted manufacturing overhead costs }$
$\begin{array}{lll}\text { Flant Maintenance } & \text { PM (Support Dept) } & \$ 350,000 \\\text { Data Processing } & \text { DP (Support Dept) } & \$ 75,000 \\\text { Machining } & \text { M (Operating Dept) } & \$ 225,000 \\\text { Capping } & \text { C (Operating Dept) } & \$ 125,000\end{array}$

$\text { Services furmished: }$
$\begin{array}{ll}\text { By Plant Maintenance (bud geted labor-hours) : }\\\text { to Data Processing } & 3,500 \\\text { to Machining } & 5,000 \\\text { to Capping } & 8,200\\\text { By Data Processing (bud geted computer time) : }\\\text { to Plant Maintenance } & 600 \\\text { to Machining } & 3,500 \\\text { to Capping } & 600\end{array}$
-Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department?

• A) DP= $75,000 + (600/4,700) PM
• B) DP= $75,000 + (3,500/16,700) PM
• C) DP= $75,000 × (600/4,700) + $350,000 × (3,340/16,700)
• D) DP= $350,000 + (600/16,700) DP

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