32)

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly:

	Square Feet	Number of Employees
Janitorial Department	100	20
Cafeteria Department	10,000	10
Cutting Department	2,000	60
Assembly Department	8,000	20

If the Cafeteria Department incurs costs of $500,000, how much of that cost is allocated to the Assembly Department?

a.$111,000

b.$375,000

c.$91,000

d.$125,000

31)

Departmental information for the four departments at Samoa Industries is provided below.

	Total Cost		Cost Driver		Square Feet		Number of Employees
Janitorial	$150,000		Square footage serviced		200		40
Cafeteria	50,000		Number of employees		20,000		12
Cutting	1,125,000				4,000		120
Assembly	1,100,000				16,000		40

The Janitorial and Cafeteria departments are support departments. Determine the dollar amount of the Janitorial Department costs to be allocated to the (a) Cutting and (b) Assembly departments using the direct method.

a. Cutting Department		$
b. Assembly Department		$

30)

Costs that remain constant in total dollar amount as the level of activity changes are called ________ costs.

a.fixed

b.variable

c.mixed

d.product