9. (TCO 6) The building maintenance department for Jones Manufacturing Company b

Question

9. (TCO 6) The building maintenance department for Jones Manufacturing Company budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases: Production Dept. 1 Production Dept. 2 Square footage 15,000 45,000 Direct labor hours 25,000 50,000 If Jones assigns costs to departments based on square footage, how much total costs will be allocated to Production Department 1? (Points : 4) A. $1,400,000 B. $1,050,000 C. $1,575,000 D. $2,100,000 PLEASE SHOW WORK

Explanation / Answer

Hi, Please find the calculations as follows: =4200000*(15000/60000) = 1050000 (option B is correct). Thanks.

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