Weisenborn Corporation Uses the Direct Method to Allocate Service Department

question 49

Multiple Choice

Weisenborn Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.
-The total Fabrication Department cost after service department allocations is closest to:

• A) $235,821
• B) $227,905
• C) $234,336
• D) $231,641

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Definitions:

Overapplied Manufacturing Overhead

A scenario in which the overhead costs assigned to manufacturing exceed the actual overhead expenses incurred.

Cost of Goods Sold

An expense measured and recorded on the income statement, representing the total cost of goods that were sold during a specified period.

Manufacturing Overhead Account

An account that tracks indirect production costs such as factory utilities, maintenance, and rent.

Job Costing

A method of costing that assigns expenses to specific jobs or projects.