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Question 16 (2 points) Use the following information to answer questions 16-18 The three service departments (indirect costs) are payroll, sales supervision and maintenance. The actual costs of these service departments are as follows: Payroll Sales Supervision Maintenance Salaries and wages $41,000 $80,000 $52,000 Office supplies $3,500 $1,600 $400 Supplies 0 $2,400 $7,500 The two operating departments and their statistics are as follows: Square Footage Number of Net Assets Employees Machining Assembly 14,500 4,600 78 52 $ 420,000 $ 280,000 If you allocate payroll department costs by number of employees then how much payroll cost is allocated to the Machining Department? 1) 22,250 2) 29,667 3) 26,700 4) 17,800 Question 17 (2 points) Use the following information to answer questions 16-18 The three service departments (indirect costs) are payroll, sales supervision and maintenance. The actual costs of these service departments are as follows: Payroll Sales Supervision Maintenance Salaries and wages $41,000 $80,000 $52,000 Office supplies $3,500 $1,600 $400 Supplies 0 $2,400 $7,500 The two operating departments and their statistics are as follows: Square Footage Number of Net Assets Employees 14,500 78 $ 420,000 4,600 52 $ 280,000 Machining Assembly If you allocate Maintenance department costs by square footage, how much of the maintenance cost will be allocated to the assembly department? 1) 14,426 2) 29,950 3) 19,003 4) 45,474 Question 18 (2 points) Use the following information to answer questions 16- 18 The three service departments (indirect costs) are payroll, sales supervision and maintenance. The actual costs of these service departments are as follows: Payroll Sales Supervision Maintenance Salaries and $41,000 $80,000 $52,000 wages Office supplies $3,500 $1,600 $400 Supplies 0 $2,400 $7,500 The two operating departments and their statistics are as follows: Square Footage Number of Net Assets Employees 14,500 78 $ 420,000 4,600 $ 280,000 Machining Assembly 52 Which of the following statements is true regarding allocating costs from the service departments to operating departments? 1) The machining department manager would prefer allocating costs evenly between assembly and machining. 2) The machining department manager would prefer allocating sales supervision costs using net assets rather than square footage. 3) Allocating payroll department costs using number of employees would not be a appropriate approach. 4) Allocating maintenance cost based on square footage makes more sense than allocating based on the number of machines used in the operating department

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