Service Department Cost Activity Base for Allocation GraphicsProduction $200,000 number of copiesAccounting 500,000 number of invoices processedPersonnel Department 400,000 number of employeesABC has three separate divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows:Micro Macro SuperDirect revenues $700,000 $850,000 $650,000Direct operating expenses 50,000 70,000 100,000Number of copies made 20,000 30,000 50,000Number of invoices processed 700 800 500Number of employees 130 145 125What is the service department charge rate for the Personnel Department?A $2,758B $3,200C. $1,000D. $3,077

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camelatcat · Accepted Answer

Personnel department ÷ total number of employees  =      $    400  ,  000  ÷  400     e  m  p  l  o  y  e  e  s  =      $    1  ,  000We simply divided the personnel department cost by the total number of employeesThe total number of employees is shown below:  =  130  +  145  +  125  =  400 employees

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