The Uinta Company Has Two Service Departments and Two Operating

question 38

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 2 to Department Y are:

• A)$18,000
• B)$24,000
• C)$21,000
• D)$25,200

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Definitions:

Sales

The total revenue generated from selling goods or services over a certain period.

Variable Costs

Costs that vary depending on the level of activity within a business, like those associated with raw materials or the production process.

Net Income

The net income of a business once all deductions, including expenses, taxes, and other costs, are made from its total earnings.

Selling Price

The price at which goods or services are offered to consumers.