Saylind Molding paid $280,000 in rent for the year.
The company’s three departments are headrests,
armrests, and air ducts.
The departments occupy 5,000, 6,300, and 2,700 square feet, respectively.
How much of the rent cost should be allocated to the products made in the air ducts department?
a. $ 54,000
Employees of DTI, Inc. worked 1,600 direct labor hours in January and 1,000 direct labor hours in
DTI expects to use 18,000 direct labor hours during the year, and expects to incur
$22,500 of Worker’s Compensation insurance cost for the year.
The cash payment for this cost will
be paid in April.
How much insurance premium should be allocated to products made in January
a. $7,200; $5,500
c. $4,000; $2,500
Costs that can be traced to objects in a cost-effective manner are called
a. allocated costs.