The production departments at Windsor Parke occupy a total area of 50,000 square feet.Heating costs total $600,000 and are allocated based on the area that each department occupies.The finishing department occupies 30,000 square feet and the packaging department occupies 20,000 square feet.What amount of heating cost will be allocated to the finishing and packaging departments, respectively?
A)$360,000 and $240,000
B)$300,000 and $300,000
C)$36,000 and $24,000
D)$32,727 and $21,818

Question

Quizplus · Accepted Answer

The finishing department occupies 60% (30,000/50,000) of the total area and the packaging department occupies 40% (20,000/50,000) of the total area. Therefore, the finishing department will be allocated 60% of the heating cost ($600,000 x 0.6 = $360,000) and the packaging department will be allocated 40% of the heating cost ($600,000 x 0.4 = $240,000).

The Production Departments at Windsor Parke Occupy a Total Area