A) $10,000. B) $12,000. C) $18,000. D) $30,000. E) $15,000.
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
Salaries
Total
$ 30,000
Allocation Basis
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Item
Number of employees
Drilling
1,000
Grinding
1,500
Total
2,500
Net sales
$ 325,000
$ 475,000
$ 800,000
Cost of goods sold
$ 75,000
$ 125,000
$ 200,000
The amount of depreciation that should be allocated to Drilling for the current period is:
A) $12,500. B) $ 7,500. C) $40,000. D) $25,000. E) $20,000.
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
Salaries
Total
$ 30,000
Allocation Basis
Number of employees
Depreciation
20,000
Cost of goods sold
Advertising
40,000
Net sales
Item
Number of employees
Drilling
1,000
Grinding
1,500
Total
2,500
Net sales
$ 325,000
$ 475,000
$ 800,000
Cost of goods sold
$ 75,000
$ 125,000
$ 200,000
The amount of the advertising cost that should be allocated to Drilling for the current period is:
A) $ 23,750. B) $16,250. C) $325,000. D) $ 45,000. E) $ 54,250.
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) Cost center.
C) Operating or production department.
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) $2,000. B) $4,000. C) $5,000. D) $3,000. E) $8,000.
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) $4,000. B) $3,000. C) $5,000. D) $2,000. E) $8,000.
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) $3,000. B) $2,200. C) $2,000. D) $4,400. E) $4,000.
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 66
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) $110,000. B) $103,000. C) $55,000. D) $48,000. E) $104,000.
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) $104,000. B) $103,000. C) $ 55,000. D) $110,000. E) $ 48,000.
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) $ 55,000. B) $103,000. C) $104,000. D) $ 48,000. 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) $ 77,000. B) $110,000. C) $ 55,000. D) $ 48,000. E) $103,000.
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) $ 32,000. C) $ 55,000. D) $103,000. 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) $110,000. B) $ 48,000. C) $103,000. D) $45,000. E) $ 55,000.
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) $18,500. C) $30,000 D) $22,667. E) $17,000.
Welding
12,000
Carpentry
6,000
Total
36,000
Administrative
Maintenance
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
Electrical
Students
120
10,000
Classrooms
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) $22,667. B) $17,000. C) $11,111. D) $18,500. E) $8,929.
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) $2,000.
B) $1,714.
C) $1,111. D) $1,850.
E) $12,000.
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) $92,412. D) $76,500. E) $90,780.
