ZanaTech has an on-site cafeteria in which it provides free meals for employees.The company allocates the cost of the cafeteria to production departments using the direct method based on the number of employees in each department.The four production departments in the company have the following number of employees: molding, 15; polishing, 20; engraving, 10; and packaging, 15.There are 20 employees in the cafeteria.The cafeteria's costs are budgeted at $144,000 for the year.When the cafeteria's costs are allocated, what is the amount per employee that will be allocated to the packaging department each year?
A)$2,400
B)$9,600
C)$1,800
D)None of these answer choices are correct.

Question

Quizplus · Accepted Answer

The cafeteria's costs are allocated based on the number of employees in each department. The packaging department has 15 employees, and the cafeteria's costs are budgeted at $144,000 for the year. Therefore, the amount per employee that will be allocated to the packaging department each year is $144,000 / 60 = $2,400.

ZanaTech Has an On-Site Cafeteria in Which It Provides Free