Hunghi Company has three support departments whose direct department costs are $35,000, $45,000, and $55,000, respectively, and two producing departments whose direct department costs are $400,000 and $360,000, respectively. The combined total department cost for the producing departments after allocation of the support departments is
A)$360,000.
B)$760,000.
C)$895,000.
D)$135,000.

Question

Quizplus · Accepted Answer

The total direct costs for the producing departments are $400,000 + $360,000 = $760,000. Adding the support departments' costs ($35,000 + $45,000 + $55,000 = $135,000) to the producing departments' costs gives $760,000 + $135,000 = $895,000.

Hunghi Company Has Three Support Departments Whose Direct Department Costs