The Production Section of a Firm Is Serviced by Personnel

question 30

Multiple Choice

The production section of a firm is serviced by personnel and computing as follows:
Personnel costs are allocated on the number of employees and computing costs on service hours.Overhead rates are based on labour hours.If the reciprocal services method is used to allocate support department costs,the total support department costs allocated to the Assembly Department (rounded) would be:

• A) $55 927
• B) $52 800
• C) $53 800
• D) $56 072

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Definitions:

Influence Market Prices

The action or power of a factor to affect the prices in a market, which could be through supply, demand, or external factors.

Externality

A consequence of an economic activity experienced by unrelated third parties; can be either positive or negative.

Neighbors

Individuals or entities located near one another, often used in the context of residential, geographic, or international proximity.

Market Failure

An instance where the free market's distribution of goods and services is inefficient, usually causing a reduction in net social welfare.