Use the following information for the next 6 questions.
The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected:
-If the direct method is used, maintenance costs allocated to the cafeteria will be
A) $28,571.43
B) $15,909
C) $10,000
D) $0

Question

Use the following information for the next 6 questions.
The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: 
-If the direct method is used, maintenance costs allocated to the cafeteria will be
A) $28,571.43 
B) $15,909 
C) $10,000 
D) $0

Quizplus · Accepted Answer

The direct method allocates costs directly to the producing departments only, not to other service departments like the cafeteria.

Use the Following Information for the Next 6 Questions