(Appendix 4B) The James Corporation has four departments with data as follows:

-Maintenance Department costs are allocated on the basis of labor hours.The amount of cost allocated to Milling from Maintenance under the direct method would be:
A) $5,600
B) $6,720
C) $5,250
D) $5,700

Question

(Appendix 4B) The James Corporation has four departments with data as follows:
 
-Maintenance Department costs are allocated on the basis of labor hours.The amount of cost allocated to Milling from Maintenance under the direct method would be:
A) $5,600 
B) $6,720 
C) $5,250 
D) $5,700

Quizplus · Accepted Answer

Allocation base = 5,250 + 4,750 = 10,000
Cost allocated from Maintenance to Milling = $10,000 × (5,250/10,000) = $5,250

(Appendix 4B) the James Corporation Has Four Departments with Data