The Accountant for Milton, Inc

question 59

Multiple Choice

The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments
Maintenance Cafeteria Cutting Packaging
Direct costs $50,000 $45,000 $275,000 $300,000
Number of employees 15 10 150 250
Square metres 1,500 2,000 3,500 4,000
If the step-down method is used and maintenance is allocated first, the total cost allocated to the cutting department will be:

• A)$55,757
• B)$39,243
• C)$20,822
• D)$40,208

Understand the concept of utility maximization and its application in consumer choice.

Comprehend the law of diminishing marginal utility and how it affects consumer decisions.

Analyze the effect of changes in prices on utility maximization.

Calculate marginal utility and understand its role in determining optimal consumption choices.