ABC Corporation has three service departments with the following costs and cost drivers: Service Department Cost Cost Driver Graphics Production $200,000 Number of copies made Accounting 500,000 Number of invoices processed Personnel 400,000 Number of employees ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost, and activity information is as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses $50,000 $70,000 $100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 What is the service department allocation rate for the Personnel Department? a.$1,000 per employee b.$2,758 per employee c.$3,077 per employee d.$3,200 per employee
ABC Corporation has three service departments with the following costs and cost drivers: Service Department Cost Cost Driver Graphics Production $200,000 Number of copies made Accounting 500,000 Number of invoices processed Personnel 400,000 Number of employees ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost, and activity information is as follows: Micro Macro Super Revenues $700,000 $850,000 $650,000 Direct operating expenses $50,000 $70,000 $100,000 Number of copies made 20,000 30,000 50,000 Number of invoices processed 700 800 500 Number of employees 130 145 125 What is the service department allocation rate for the Personnel Department? a.$1,000 per employee b.$2,758 per employee c.$3,077 per employee d.$3,200 per employee
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 9E: A manufacturing company has two service and two production departments. Human Resources and Machine...
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Use this information for ABC Corporation to answer the question that follow.
ABC Corporation has three service departments with the following costs and cost drivers:
| Service Department | Cost | Cost Driver |
| Graphics Production | $200,000 | Number of copies made |
| Accounting | 500,000 | Number of invoices processed |
| Personnel | 400,000 | Number of employees |
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost, and activity information is as follows:
| Micro | Macro | Super | |
| Revenues | $700,000 | $850,000 | $650,000 |
| Direct operating expenses | $50,000 | $70,000 | $100,000 |
| Number of copies made | 20,000 | 30,000 | 50,000 |
| Number of invoices processed | 700 | 800 | 500 |
| Number of employees | 130 | 145 | 125 |
What is the service department allocation rate for the Personnel Department?
a.$1,000 per employee
b.$2,758 per employee
c.$3,077 per employee
d.$3,200 per employee
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