27. Riemer, Inc. has four departments. Information about these departments is li

Question

27.

Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.)

A. $4,524.

B. $3,500.

C. $1,800.

D. $18,000.

PLEASE ADD EXPLANATION

$3,169.

Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.)

Explanation / Answer

If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.)

Total square feet = (1400+2400+3400) = 7200

Maintenance cost allocated to cutting department =18000*1400/7200 = $3500

so answer is b) $3500

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