Stoltz Corporation uses the direct method to allocate service department costs to operating departments.The company has two service departments,Data Processing and Personnel,and two operating departments,Assembly and Finishing. Data Processing Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Data Processing Department cost allocated to the two operating departments is closest to:
A) $23,245
B) $26,488
C) $61,567
D) $16,874

Question

Stoltz Corporation uses the direct method to allocate service department costs to operating departments.The company has two service departments,Data Processing and Personnel,and two operating departments,Assembly and Finishing.  Data Processing Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.The total amount of Data Processing Department cost allocated to the two operating departments is closest to:
A) $23,245 
B) $26,488 
C) $61,567 
D) $16,874

Quizplus · Accepted Answer

Data Processing costs to be allocated = $26,488

Stoltz Corporation Uses the Direct Method to Allocate Service Department