At the Wild Cat Group Company, the cost of the library and information center ha

Question

At the Wild Cat Group Company, the cost of the library and information center has always benn charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs.

Total library and information center costs are $213,000.

Number of employees

If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to Department A? (Round any intermediary calculations to two decimal places and final answer to the nearest dollar.

Department A B C

Number of employees

180 520 150 Number of new hires 10 60 35

Explanation / Answer

Answer: $44,730 cost of library and information center will be allocated to Department A

Explaination: Cost Center = No of employees

Sr.No. Purticuler's Amount 1 Total library and information center costs $213,000 2 Total number of Employees (180+520+150) 850 3 No.of employees of Department A 180 4 Share of Department A [3/2] .21 5 Costs will be allocated to Department A (1*4) $44,730

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