PIR Corporation Has 2 Support Departments and 2 Operating Departments

question 108

Multiple Choice

PIR Corporation has 2 support departments and 2 operating departments. Number of employees is used as an allocation base for personnel support costs, and square metres are used for janitorial support costs. A breakdown of their costs, along with other operating information, is shown below for a recent accounting period: Support Departments Operating Departments
Personnel Janitorial Assembly Finishing
Direct Costs:
Fixed $ 8,000 $ 4,000 $ 3,000 $ 4,000
Variable 6,000 10,000 12,000 6,000
Total $14,000 $14,000 $15,000 $10,000
Number of employees 10 15 30 20
Square metres 3,000 5,000 10,000 10,000
If PIR uses single-rate allocation and the direct method, the allocation rate for personnel will be:

• A)$280 per employee
• B)$215 per employee
• C)$187 per employee
• D)None of the above

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Definitions:

Host Country

The country in which a multinational company operates a facility or office, outside of its home country.

Local Labor Market

The supply and demand for workers within a specific region or area, affecting employment and wages.

Host Country

The country in which a multinational company operates a facility, as opposed to the country where the company is headquartered.

Qualified People

Individuals who meet the necessary standards and qualifications for a job, project, or activity, based on their skills, experiences, and education.