Question 13 (4 points) M Manufacturing has 2 service departments, information te

Question

Question 13 (4 points) M Manufacturing has 2 service departments, information technology (IT) and maintenance and 3 production departments, fabricating, assembling and finishing. For the current year of operation, M reported the following hours of service to each department by the service departments. IT Maintenance Fabricating Assembling Finishing 3,000 1,000 8,000 2,0o0 IT 2,000 Maintenance 1,000 10,000 Assuming the company uses the direct allocation approach of allocating service department costs, which of the following statements is true? O a) (6,000/12,000) of the costs of the IT department will be allocated to the fabricating department. b) (2,000/20,000) of the costs of the maintenance department will be allocated to finishing department. O ) (10,000/21,000) of the costs of the maintenance department will be allocated to the fabricating department d) (1,000/21,000) of the costs of the maintenance department will be allocated to the IT department.

Explanation / Answer

(2000/20000) of the costs of the Maintenance department will be allocated to Finishing department Option B is correct

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