The Reeve Ltd Manufacturing Company Ltd has two production departments (Assembly and Finishing) and two...
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Accounting
The Reeve Ltd Manufacturing Company Ltd has two production departments (Assembly and Finishing) and two support departments (Repairs and Engineering). The usage of the two support departments in 20X2 is as follows:
| Service provided by: | Service provided to: | |||
| Repairs | Engineering | Assembly | Finishing | |
| Repairs | - | 10% | 60% | 30% |
| Engineering | 20% | - | 40% | 40% |
The budgeted costs in the support departments of 20X2 were as follows:
Repairs $90,000
Engineering $50,000
Using the direct method, what is the Engineering Department cost allocated to the Assembly Department?
A.
$34,000
B.
$26,000
C.
$25,000
D.
$28,000
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