f Cafeteria costs are budgeted at R69 375, the amount of cost allocated to Operating Department 2 would be closest to: A. R18 500 B. R18 750 C. R19 821 D. R46 875
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Parker Company has two service departments, Cafeteria and Engineering, and two operating departments. The number of employees in each department is given below:
|
Cafeteria |
10 |
|
Engineering |
40 |
|
Operating Department 1 |
500 |
|
Operating Department 2 |
200 |
The company uses the step method to allocate service department cost. Cafeteria is allocated first, and then Engineering.
The costs of the Cafeteria are allocated to other departments on the basis of number of employees in the departments.
If Cafeteria costs are budgeted at R69 375, the amount of cost allocated to Operating Department 2 would be closest to:
| A. |
R18 500 |
|
| B. |
R18 750 |
|
| C. |
R19 821 |
|
| D. |
R46 875 |
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