Amorim Corporation Uses the Direct Method to Allocate Service Department

question 20

Multiple Choice

Amorim Corporation uses the direct method to allocate service department costs to operating departments.The company has two service departments,Data Processing and Personnel,and two operating departments,Assembly and Finishing. Data Processing Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Data Processing Department cost allocated to the two operating departments is closest to:

• A)$34,944
• B)$145,367
• C)$31,329
• D)$25,774

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Definitions:

List Price

The advertised or published price of a product or service before any discounts or deductions are applied.

Annual Property Taxes

Taxes assessed on property ownership, levied annually based on the property's assessed value.

Real Estate

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Title Fees

Costs associated with the transfer of ownership or the establishment of rights to a property.