The Direct Method Is Used by Adamski Publishing, Inc

question 11

Multiple Choice

The direct method is used by Adamski Publishing, Inc., to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Prepress and Printing. 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 Prepress Department cost after service department allocations is closest to:

• A)$459,351
• B)$455,856
• C)$450,938
• D)$461,782

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Definitions:

Demanders

Individuals or entities that show a willingness and ability to purchase goods or services.

Households

Economic units consisting of all the people who occupy a housing unit, playing a crucial role in the economy by providing factors of production and consuming goods and services.

Goods And Services

The physical items (goods) and intangible assistance (services) that satisfy human wants and needs, which are produced and consumed by people.

Utility

The satisfaction received from consumption; sense of well-being.