Behrend Clinic uses the direct method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Support,and two operating departments,Prenatal and Pediatrics. Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to:
A) $441,260
B) $443,660
C) $433,440
D) $444,471

Question

Behrend Clinic uses the direct method to allocate service department costs to operating departments.The clinic has two service departments,Personnel and Support,and two operating departments,Prenatal and Pediatrics.  Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet.The total Pediatrics Department cost after the allocations of service department costs is closest to:
A) $441,260 
B) $443,660 
C) $433,440 
D) $444,471

Quizplus · Accepted Answer

Allocation base for Personnel costs = 26,000 + 14,000 = 40,000
Allocation base for Support costs = 35,000 + 8,000 = 43,000
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Behrend Clinic Uses the Direct Method to Allocate Service Department