Use the following information for the next 3 questions
Pardee, Inc. allocates engineering costs on the basis of the supervisor's time and administration costs on the basis of the number of employees. The company's accountant determined that engineering provides more services to administration than administration provides to engineering. The following data have been collected:
-If the direct method is used, the fraction of engineering costs allocated to the finishing department will be
A) 20/55
B) 20/100
C) 20/70
D) 20/85

Question

Use the following information for the next 3 questions
Pardee, Inc. allocates engineering costs on the basis of the supervisor's time and administration costs on the basis of the number of employees. The company's accountant determined that engineering provides more services to administration than administration provides to engineering. The following data have been collected: 
-If the direct method is used, the fraction of engineering costs allocated to the finishing department will be
A) 20/55 
B) 20/100 
C) 20/70 
D) 20/85

Quizplus · Accepted Answer

The direct method allocates service department costs directly to production departments based on usage. If the finishing department uses 20 out of a total of 55 units of engineering services, the fraction allocated is 20/55.

Use the Following Information for the Next 3 Questions