Quinlan, Inc

question 76

Multiple Choice

Quinlan, Inc. has two support departments (Maintenance and Personnel) and two operating departments (Tables and Chairs) . The Maintenance department provides more services to the Personnel department than the Personnel department provides to Maintenance. Once the support department costs have been allocated to the operating departments, each operating department allocates its total costs to units produced. Support Departments Operating Departments
Maintenance Personnel Tables Chairs
Direct costs $27,000 $24,000 $44,000 $21,000
Square metres 6,000 10,000 20,000 60,000
Number of employees 20 40 70 80
Units produced ---- ---- 4,000 2,000
Assume the direct method is used. The proportion of Personnel's costs allocated to the Table department is:

• A)1/2
• B)4/7
• C)7/15
• D)1/3

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Definitions:

Special-interest Legislation

Special-interest legislation refers to laws or regulations enacted to benefit specific groups or interests, often at the expense of the broader public interest.

Concentrated Costs

Expenses that are not spread out but are borne largely by a small group.

Widespread Costs

involve expenses that affect a large segment of the economy, often implying that these costs are distributed across many individuals or entities.

Private-sector Provision

Services or goods provided by businesses owned by individuals or shareholders, rather than by the government.