The direct method is used by Adamski Publishing, Inc., to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Prepress and Printing. 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 Prepress Department cost after service department allocations is closest to:
A)$459,351
B)$455,856
C)$450,938
D)$461,782

Question

The direct method is used by Adamski Publishing, Inc., to allocate service department costs to operating departments. The company has two service departments, Information Technology and Personnel, and two operating departments, Prepress and Printing.  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 Prepress Department cost after service department allocations is closest to:
A)$459,351 
B)$455,856 
C)$450,938 
D)$461,782

Quizplus · Accepted Answer

The Answer is D

The Direct Method Is Used by Adamski Publishing, Inc