Personnel expenses would most likely be allocated to operating departments using which allocation base?Multiple choice question.Sales dollars generatedNumber of employeesSquare feet of floor space occupiedPurchase orders processed
Question
Personnel expenses would most likely be allocated to operating departments using which allocation base?Multiple choice question.Sales dollars generatedNumber of employeesSquare feet of floor space occupiedPurchase orders processed
Solution
The most likely allocation base for personnel expenses to operating departments would be the "Number of employees". This is because personnel expenses are typically directly related to the number of employees in each department. The more employees a department has, the higher its personnel expenses are likely to be. Therefore, using the number of employees as the allocation base would provide the most accurate distribution of these costs.
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InfoTech Horizons has three departments: A, B, and C. The total overheads are $200,000. The overheads are apportioned based on the floor area occupied by each department. Department A occupies 2,000 sq. ft., Department B occupies 3,000 sq. ft., and Department C occupies 5,000 sq. ft. Calculate the overhead apportioned to each department.Question 7Answera.Department A: $140,000Department B: $60,000Department C: $100,000b.Department A: $60,000Department B: $40,000Department C: $100,000c.Department A: $100,000Department B: $60,000Department C: $40,000d.Department A: $40,000Department B: $60,000Department C: $100,000
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