Use the information below to answer the following question(s).
Joe's Tire Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.
Data on standard service hours and number of employees are as follows:

-How much of the cost of the Personnel Department is allocated to Department B using the direct method?
A) $8,000
B) $15,000
C) $5,000
D) $12,632
E) $60,000

Question

Use the information below to answer the following question(s).
Joe's Tire Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.
Data on standard service hours and number of employees are as follows:
 
-How much of the cost of the Personnel Department is allocated to Department B using the direct method?
A) $8,000 
B) $15,000 
C) $5,000 
D) $12,632 
E) $60,000

Quizplus · Accepted Answer

[(120/160) × $20,000] = $15,000

Use the Information Below to Answer the Following Question(s)