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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