The Computer Department in a Large Company Provides Services to Many

question 117

Multiple Choice

The Computer Department in a large company provides services to many departments.The cost driver for costs in the Computer Department is the number of computer hours.When allocating fixed costs of the Computer Department to a user department such as Department A,which of the following formulas is used?

• A) budgeted fixed cost × (budgeted hours to be used by Department A/total available capacity hours of Computer Department)
• B) budgeted fixed cost × (actual hours used by Department A/total available capacity hours of Computer Department)
• C) actual fixed cost × (budgeted hours to be used by Department A/total available capacity hours of Computer Department)
• D) actual fixed cost × (actual hours used by Department A/total available capacity hours of Computer Department)

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Definitions:

Surgery Department

A specialized department within a hospital where surgical procedures are performed.

Computer Workstations

High-performance computers designed for technical or scientific applications, often used in professional contexts.

Employees

Individuals who are hired by a company or organization to perform specific duties and tasks in exchange for compensation.

Step-Down Method

A method used in accounting to allocate service department costs to producing departments based on a hierarchy or sequence of steps.