Use the following information for the next 3 questions.
PIR Corporation has 2 support departments and 2 operating departments. Number of employees is used as an allocation base for personnel support costs, and square feet are used for janitorial support costs. A breakdown of their costs, along with other operating information, is shown below for a recent accounting period:
-If PIR uses single-rate allocation and the direct method, the allocation rate for personnel will be
A) $280 per employee
B) $215 per employee
C) $187 per employee
D) None of the above

Question

Use the following information for the next 3 questions.
PIR Corporation has 2 support departments and 2 operating departments. Number of employees is used as an allocation base for personnel support costs, and square feet are used for janitorial support costs. A breakdown of their costs, along with other operating information, is shown below for a recent accounting period: 
-If PIR uses single-rate allocation and the direct method, the allocation rate for personnel will be
A) $280 per employee 
B) $215 per employee 
C) $187 per employee 
D) None of the above

Quizplus · Accepted Answer

The allocation rate for personnel is calculated by dividing the total personnel costs by the number of employees. In this case, the total personnel costs are $56,000 and the number of employees is 200. Therefore, the allocation rate for personnel is $56,000 / 200 = $280 per employee.

Use the Following Information for the Next 3 Questions