MC Qu. 78 Riemer, Inc. has four... Riemer, Inc. has four departments Information

Question

MC Qu. 78 Riemer, Inc. has four... Riemer, Inc. has four departments Information about these departments is listed below. Maintenance is a service department If allocated maintenance cost is based on floor space occupled by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department (Do not round your intermediate computations) Direct costs Sq ft. of space $17000 $25,000 $65,000 $40,000 2,600 2,200 No. of employees O $3.400 O $2.369. O $17000 o $8,500. O $3524 References Multiple Choice MC Ou: 78 Riemer Inc has four DOLL F3 F5 F8 F11 2 3 4 5 6 7 8

Explanation / Answer

Amount of Maintenance cost allocated to Cutting department = Maintenance department cost * [Square feet occupied by cutting department/Total Square feets occupied by production department] Amount of Maintenance cost allocated to Cutting department = $17000 * [1200 Sq.Fts/6000 Sq.Fts] Amount of Maintenance cost allocated to Cutting department = $3400

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