Abound Company Has Two Support Departments (S1 and S2) and Two

question 60

Multiple Choice

Abound Company has two support departments (S1 and S2) and two producing departments (X and Y) . Department S1 serves Departments S2, X, and Y in the following percentages, respectively: 10%, 35%, 55%. Department S2 serves Departments S1, X, and Y in the following percentages, respectively: 6%, 50%, and 44%. Direct department costs for S1, S2, X, and Y are $15,000, $8,000, $105,000, and $97,500, respectively.
What are the total costs to be allocated from Department S1?

• A)$15,573
• B)$800
• C)$9,500
• D)$15,000

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Definitions:

Urgency

The quality or state of requiring immediate attention or action.

Expense

The cost incurred in the process of generating revenue, representing money spent or resources consumed to conduct business activities.

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