Weisenborn Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization. Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.
-The total Fabrication Department cost after service department allocations is closest to:
A) $235,821
B) $227,905
C) $234,336
D) $231,641

Question

Weisenborn Corporation uses the direct method to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Fabrication and Customization.  Information Technology Department costs are allocated on the basis of computer workstations and Personnel Department costs are allocated on the basis of employees.
-The total Fabrication Department cost after service department allocations is closest to:
A) $235,821 
B) $227,905 
C) $234,336 
D) $231,641

Quizplus · Accepted Answer

The total Fabrication Department cost after service department allocations is $235,821. This is calculated by adding the direct costs of the Fabrication Department ($195,000) to the allocated service department costs ($40,821).

Weisenborn Corporation Uses the Direct Method to Allocate Service Department