Figure 7-6 Oaks Company Has Two Support Departments, Maintenance Department

question 130

Multiple Choice

Figure 7-6 Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD) , and two producing departments, P1 and P2.The Maintenance Department costs of $30,000 are allocated on the basis of standard service used.The Personnel Department costs of $4,500 are allocated on the basis of number of employees.The direct costs of Departments P1 and P2 are $9,000 and $15,000, respectively.
Data on standard service hours and number of employees are as follows:

-Refer to Figure 7-6.What is the combined total department costs for the producing departments after allocation of the support departments?

• A) $24,000
• B) $58,500
• C) $34,500
• D) $26,000

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that controls the body’s response to perceived threats, often termed as the "fight or flight" response.

Digestive Activity

The complex process of breaking down food into absorbable components in the digestive system.

Salivary Activity

The production and release of saliva from the salivary glands in the mouth, which aids in digestion and helps maintain oral health.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's rapid involuntary response to dangerous or stressful situations, often referred to as "fight or flight" response.