The Uinta Company Has Two Service Departments and Two Operating

question 8

Multiple Choice

The Uinta Company has two service departments and two operating departments. The following data are available from last year: The costs of service departments 1 and 2 are allocated on the basis of number of transactions and square feet occupied respectively. No distinction is made between fixed and variable costs.
-Assume that Uinta allocates service department costs by the step-down method,starting with Department 1.The total overhead costs allocated from Department 1 to Department X are:

• A)$12,115
• B)$21,000
• C)$24,000
• D)$33,600

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Definitions:

Marginal Cost

The elevation in aggregate expenditure triggered by the output of one supplementary unit of a good or service.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Sales Revenue

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.