The Amount of Personnel Department Cost That Would Be Allocated

question 31

Multiple Choice

The amount of Personnel Department cost that would be allocated to Operating Department 2 under the direct method would be:

• A)$0
• B)$388,500
• C)$420,000
• D)$370,000

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Definitions:

External Benefits

External Benefits are positive effects of a production or consumption activity on third parties who did not directly participate in the economic transaction.

Living in Poverty

The condition of having insufficient resources or income to meet basic life needs.

Invisible Hand

A metaphor introduced by Adam Smith to describe the self-regulating nature of the marketplace, where individual self-interests unintentionally benefit society as a whole.

Price Mechanism

The way in which prices rise and fall as a result of changes in demand and supply, guiding the allocation of resources in a market economy.