ABC Corporation has three service departments with the following costs and activity base: ...
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Accounting
ABC Corporation has three service departments with the following costs and activity base:
| Service Department | Cost | Activity Base for Allocation |
| Graphics Production | $200,000 | number of copies |
| Accounting | 500,000 | number of invoices processed |
| Personnel Department | 400,000 | number of employees |
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:
| Micro | Macro | Super | |
| Direct revenues | $700,000 | $850,000 | $650,000 |
| Direct operating expenses | 50,000 | 70,000 | 100,000 |
| Number of copies made | 20,000 | 30,000 | 50,000 |
| Number of invoices processed | 700 | 800 | 500 |
| Number of employees | 130 | 145 | 12 |
How much service department cost would be allocated to the Macro Division?
a.$305,000
b.$130,000
c.$175,000
d.$405,000
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