91) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of depreciation that should be allocated to Grinding for the current period is:
A) $20,000.
B) $25,000.
C) $7,500.
D) $12,500.
E) $40,000.
Depreciation:
$20,000
×
$125,000
=
$12,500
$200,000
92) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of the advertising cost that should be allocated to Grinding for the current period is:
A) $16,250.
B) $45,000.
C) $23,750.
D) $325,000.
E) $54,250.
Advertising:
$40,000
×
$475,000
=
$800,000
93) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of the total office expenses that should be allocated to Drilling for the current period
is:
A) $35,750.
B) $45,000.
C) $54,250.
D) $90,000.
E) $600,000.
Salaries:
×
1,000
=
2,500
Depreciation:
×
$75,000
=
Advertising:
×
=
Total
94) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of salaries that should be allocated to Drilling for the current period is:
A) $30,000.
B) $18,000.
C) $15,000.
D) $10,000.
E) $12,000.
Salaries:
$30,000
×
1,000
=
$12,000
2,500
95) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of depreciation that should be allocated to Drilling for the current period is:
A) $20,000.
B) $25,000.
C) $7,500.
D) $12,500.
E) $40,000.
Depreciation:
$20,000
×
$75,000
=
$7,500
96) Marks Corporation has two operating departments, Drilling and Grinding, and an office. The
three categories of office expenses are allocated to the two departments using different allocation
bases. The following information is available for the current period:
Office Expenses
Total
Allocation Basis
Salaries
$
30,000
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Drilling
Grinding
Total
1,000
1,500
2,500
$
325,000
$
475,000
$
800,000
$
75,000
$
125,000
$
200,000
The amount of the advertising cost that should be allocated to Drilling for the current period is:
A) $16,250.
B) $45,000.
C) $23,750.
D) $325,000.
E) $54,250.
Advertising:
$40,000
×
$325,000
=
$800,000
97) In a firm that manufactures clothing, the department that is responsible for actually
assembling the garments could best be described as a(n):
A) Service department.
B) Operating or production department.
C) Cost center.
D) Department in which all of the costs incurred are direct expenses.
E) Department in which all of the costs incurred are indirect expenses.
98) A company rents a building with a total of 50,000 square feet, which are evenly divided
between two floors. The company allocates the rent for space on the first floor at twice the rate
of space on the second floor. The total monthly rent for the building is $30,000. How much of
the monthly rental expense should be allocated to a department that occupies 10,000 square feet
on the first floor?
A) $8,000.
B) $5,000.
C) $3,000.
D) $4,000.
E) $2,000.
99) A company rents a building with a total of 50,000 square feet, which are evenly divided
between two floors. The company allocates the rent for space on the first floor at twice the rate
of space on the second floor. The total monthly rent for the building is $30,000. How much of
the monthly rental expense should be allocated to a department that occupies 10,000 square feet
on the second floor?
A) $8,000.
B) $5,000.
C) $3,000.
D) $4,000.
E) $2,000.
100) A company pays $15,000 per period to rent a small building that has 10,000 square feet of
space. This cost is allocated to the company’s three departments on the basis of the amount of the
space occupied by each. Department One occupies 2,000 square feet of floor space, Department
Two occupies 3,000 square feet of floor space, and Department Three occupies 5,000 square feet
of floor space. If the rent is allocated based on the total square footage of the space, Department
One should be charged rent expense for the period of:
A) $4,400.
B) $3,000.
C) $4,000.
D) $2,200.
E) $2,000.
101) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The total amount of indirect factory expenses that should be allocated to the
Assembly Department for the current period is:
A) $48,000.
B) $55,000.
C) $103,000.
D) $104,000.
E) $110,000.
102) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The amount of administration expenses that should be allocated to the
Assembly Department for the current period is:
A) $48,000.
B) $55,000.
C) $103,000.
D) $104,000.
E) $110,000.
103) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The amount of maintenance expenses that should be allocated to the
Assembly Department for the current period is:
A) $48,000.
B) $ 55,000.
C) $103,000.
D) $104,000.
E) $110,000.
104) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The total amount of indirect factory expenses that should be allocated to the
Painting Department for the current period is:
A) $48,000.
B) $55,000.
C) $77,000.
D) $103,000.
E) $110,000.
105) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The amount of administration expenses that should be allocated to the
Painting Department for the current period is:
A) $48,000.
B) $55,000.
C) $103,000.
D) $32,000.
E) $110,000.
106) Ready Company has two operating (production) departments: Assembly and Painting.
Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and
occupies 36,000 square feet. Indirect factory expenses for the current period are as follows:
Administration
$
80,000
Maintenance
$
100,000
Administration is allocated based on workers in each department; maintenance is allocated based
on square footage. The amount of maintenance expenses that should be allocated to the Painting
Department for the current period is:
A) $48,000.
B) $55,000.
C) $103,000.
D) $45,000.
E) $110,000.
107) Canfield Technical School allocates administrative costs to its respective departments based
on the number of students enrolled, while maintenance and utilities are allocated per square feet
of the classrooms. Based on the information below, what is the total amount allocated to the
Welding Department (rounded to the nearest dollar) if administrative costs for the school were
$50,000, maintenance fees were $12,000, and utilities were $6,000?
Department
Students
Classrooms
Electrical
120
10,000
sq. ft.
Welding
70
12,000
sq. ft.
Accounting
50
8,000
sq. ft.
Carpentry
40
6,000
sq. ft.
Total
280
36,000
sq. ft.
A) $0.
B) $17,000.
C) $18,500.
D) $22,667.
E) $30,000.
Department
Students
Welding
70
12,000
sq. ft.
Accounting
50
8,000
sq. ft.
Carpentry
40
6,000
sq. ft.
Total
280
36,000
sq. ft.
Administrative
$
50,000 × (70/280)
=
$
12,500
Maintenance
$
12,000 × (12,000/36,000)
=
4,000
Utilities
$
6,000 × (12,000/36,000)
=
2,000
Total
=
$
18,500
108) Canfield Technical School allocates administrative costs to its respective departments based
on the number of students enrolled, while maintenance and utilities are allocated per square feet
of the classrooms. Based on the information below, what is the total amount of administrative
cost to the Accounting Department (rounded to the nearest dollar) if administrative costs for the
school were $50,000, maintenance fees were $12,000, and utilities were $6,000?
Department
Students
Classrooms
Electrical
120
10,000
sq. ft.
Welding
70
12,000
sq. ft.
Accounting
50
8,000
sq. ft.
Carpentry
40
6,000
sq. ft.
Total
280
36,000
sq. ft.
A) $8,929.
B) $17,000.
C) $18,500.
D) $22,667.
E) $11,111.
Department
Welding
70
Accounting
50
Carpentry
40
Total
280
109) Canfield Technical School allocates administrative costs to its respective departments based
on the number of students enrolled, while maintenance and utilities are allocated per square feet
of the classrooms. Based on the information below, what is the total amount of maintenance cost
to the Carpentry Department (rounded to the nearest dollar) if administrative costs for the school
were $50,000, maintenance fees were $12,000, and utilities were $6,000?
Department
Students
Classrooms
Electrical
120
10,000
sq. ft.
Welding
70
12,000
sq. ft.
Accounting
50
8,000
sq. ft.
Carpentry
40
6,000
sq. ft.
Total
280
36,000
sq. ft.
A) $1,714.
B) $12,000.
C) $1,850.
D) $2,000.
E) $1,111.
Department
Welding
12,000
sq. ft.
Accounting
sq. ft.
Carpentry
sq. ft.
Total
36,000
sq. ft.
110) Brownley Company has two service departments and two operating (production)
departments. The Payroll Department services all three of the other departments in proportion to
the number of employees in each. The Maintenance Department costs are allocated to the two
operating departments in proportion to the floor space used by each. Listed below are the
operating data for the current period:
Service Depts.
Production Depts.
Payroll
Maintenance
Milling
Assembly
Direct costs
$
20,400
$
25,500
$
76,500
$
105,400
No. of personnel
15
15
45
Sq. ft. of space
10,000
15,000
The total cost of operating the Milling Department for the current period is:
A) $14,280.
B) $15,912.
C) $76,500.
D) $90,780.
E) $92,412.
Maintenance
$
=
$
Milling:
$
=
Assembly
$
=
12,240
$
20,400
111) Brownley Company has two service departments and two operating (production)
departments. The Payroll Department services all three of the other departments in proportion to
the number of employees in each. The Maintenance Department costs are allocated to the two
operating departments in proportion to the floor space used by each. Listed below are the
operating data for the current period:
Service Depts.
Production Depts.
Payroll
Maintenance
Cutting
Assembly
Direct costs
$
20,400
$
25,500
$
76,500
$
105,400
No. of personnel
15
15
45
Sq. ft. of space
10,000
15,000
The total cost of operating the Maintenance Department for the current period is:
A) $14,280.
B) $15,912.
C) $25,500.
D) $29,580.
E) $22,412.