Evergreen Company Has Two Support Departments (S1 and S2) and Two

question 91

Multiple Choice

Evergreen Company has two support departments (S1 and S2) and two producing departments (P1 and P2) . Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows:
If Evergreen uses the direct method, the ratio representing the portion of Department S2 allocated to P1 is

• A) 1,500/5,000.
• B) 1,500/4,000.
• C) 1,500/5,500.
• D) 1,500/2,000.

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Definitions:

Tasteless

Lacking flavor or not having any taste, often used to describe food or substances without a discernible taste.

Odorless

Lacking a detectable smell.

Liquid

A substance that flows freely but is of constant volume, having a consistency like that of water or oil.

Metabolism

The chemical processes that occur within a living organism in order to maintain life, involving anabolic and catabolic reactions.