Question 11 (4 points) B Grocery Store has 4 departments, meat, produce, bakery

Question

Question 11 (4 points) B Grocery Store has 4 departments, meat, produce, bakery and general groceries. Number of Square Feet Cubic Feet Employees Department Meat Produce Bakery General Groceries 8,000 4,000 3,000 35,000 80,000 100,000 20,000 800,000 50,0001,000,000 3 30 50 The store uses the following allocation bases to allocate common costs of the store to the 4 departments. Cost Utilities Insurance Administrative Expenses $150,000 Number of Employees Amount Allocation Base $100,000 Cubic Feet $50,000 Square Feet How much utility cost is allocated to the Produce Department? a) $6,000 b) $8,000 c) $24,000 d) $10,000

Explanation / Answer

Select - Option - 4 ........ 10000

Explanation

Total Utilities cost = 100,000

Cubic feet is the basis for allocating this 100,000 among the 4 departments.

Produce department = 100,000 CF / 1000,000 CF * $100,000 = $ 10000

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