Hanung Corp Has Two Service Departments,Maintenance and Personnel

question 52

Multiple Choice

Hanung Corp has two service departments,Maintenance and Personnel.Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance-hours.Personnel Department costs of $110,000 are allocated based on the number of employees.The costs of operating departments A and B are $188,000 and $282,000,respectively.Data on budgeted maintenance-hours and number of employees are as follows:

Using the direct method,what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations. )

• A)$100,398
• B)$128,168
• C)$87,742
• D)$167,330

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Definitions:

Risk Premium

The extra return expected by investors for holding a riskier investment over a risk-free asset.

Diversifiable Risk

Is the type of investment risk that can be reduced through diversification of a portfolio, related to specific factors affecting individual companies or sectors.

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Risks that affect all investments across the market and cannot be mitigated through diversification.