At the Auric Company, the Cost of the Personnel Department

question 10

Multiple Choice

At the Auric Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.
$$\begin{array}{l}\text { Total personnel department costs are } \$ 287,500 \text {. }\\\begin{array} { l r r r } \text { Department } & \underline { \mathbf { A } } & \underline { \mathbf { B } } & \underline { \mathbf { C } } \\\text { Number of employees } & 70 & 280 & 225 \\\text { Number of new hires } & 25 & 13 & 12\end{array}\end{array}$$
-If the number of new hires is considered the cost driver,what amount of personnel costs will be allocated to Department A?

• A) $35,000
• B) $10,667
• C) $143,750
• D) $43,700

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Definitions:

Vestibule

An entrance or enclosed anteroom between the outer door and the interior parts of a house or building, or the central cavity of the labyrinth of the ear.

Crista Ampullaris

A sensory organ located within the semicircular canals of the inner ear, detecting head movements.

Otoliths

Small calcium carbonate crystals in the inner ear that, along with hair cells, help to detect gravity and linear accelerations, contributing to balance and spatial orientation.

Macula

A specialized region in the center of the retina responsible for sharp, detailed central vision.