Castle Company Has Two Service Departments and Two Producing Departments

question 90

Multiple Choice

Castle Company has two service departments and two producing departments.The number of employees in each department is: The department costs of the Personnel Department are allocated on a basis of the number of employees.If these costs are budgeted at $37,125 during a given period,the amount of cost allocated to Department B under the direct method would be:

• A)$0.
• B)$17,187.50.
• C)$16,875.00.
• D)$18,021.84.

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Definitions:

Make-Or-Buy Options

The decision-making process where a company chooses between manufacturing a product in-house or purchasing it from an external supplier.

Differential Revenue

The difference in revenue generated under two different scenarios or choices.

Differential Revenue

The difference in revenue generated from two different business decisions, often used in managerial accounting to assess alternatives.

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action or the benefits you could have received by taking an alternative action.