ABC Corporation has three service departments with the following costs and activ
ID: 2485827 • Letter: A
Question
ABC Corporation has three service departments with the following costs and activity base:
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:
What is the service department charge rate for Graphics Production?
a.$6.66
b.$10.00
c.$2.00
d.$0.50
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 employeesExplanation / Answer
Total copies = 20000 + 30000 + 50000 = 100,000
Charge per copies = 200,000 / 100,000
= $ 2 per copy
correct option is "C"