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

question 58

Multiple Choice

Plants 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:
When Plants uses the sequential method, the support department allocated first is the one with the highest percentage of interdepartmental service.The choice of the department allocated first is determined by the comparison of the following ratio for S1 and S2, respectively:

• A) 5/60; 1,000/5,500
• B) 5/50; 1,000/5,000
• C) 10/50; 1,000/5,000
• D) 10/55; 500/4,500

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