Fairfield Company Allocates Common Building Department Costs to Producing Departments

question 4

Multiple Choice

Fairfield Company allocates common Building Department costs to producing departments (P1 and P2) based on space occupied, and it allocates common Personnel Department costs based on the number of employees. Space occupancy and employee data are as follows: If Fairfield Company uses the direct allocation method, the ratio representing the portion of building costs allocated to Department P1 is

• A) 190,000/202,000.
• B) 2,000/120,000.
• C) 120,000/202,000.
• D) 120,000/190,000.

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Definitions:

Customer's Interests

Preferences, needs, or desires that customers seek to fulfill when purchasing goods or services.

Ethical Decisions

Choices made based on moral principles and values, often involving considerations of fairness, accountability, and integrity.

Job Enlargement

The grouping of a variety of tasks about the same skill level; horizontal enlargement.

Source Inspection

The practice of inspecting goods or materials at the supplier's site before they are shipped to the purchaser, to ensure they meet specified quality standards.