Holmon Surgical Hospital Uses the Direct Method to Allocate Service

question 6

Multiple Choice

Holmon Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Information Technology and Administration, and two operating departments, Surgery and Recovery. Information Technology Department costs are allocated on the basis of computer workstations and Administration Department costs are allocated on the basis of employees.
-The total amount of Information Technology Department cost allocated to the two operating departments is closest to:

• A) $37,740
• B) $24,997
• C) $98,705
• D) $33,474

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Definitions:

Transmit Motion

The process of conveying or transferring motion from one part of a mechanical system to another.

Abbreviation

A shortened form of a word or phrase used for convenience, clarity, or brevity in written and spoken communication.

Gauge

An instrument or tool used to measure, test, or visually compare physical characteristics such as dimensions, thickness, or depth.

Spur Gears

Cylindrical gears with teeth projecting radially and having edges parallel to the axis, used to transmit motion between parallel shafts in machinery.