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Item 5 Required information Skip to question Current Time 0:00 / Duration 6:35 1x The Science Institute has three departments: Biology, Chemistry, and Physics. The institute's controller wants to estimate the cost of operating each department. He has identified several indirect costs that must be allocated to each department including $43,000 of indirect salaries, $4,500 of office supplies, and $36,500 of office rent. There are 500 students in the biology department, 200 in chemistry and 300 in physics (1,000 total students as the allocation base). The amount of cost that should be allocated to the Chemistry Department is

Sagot :

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Answer:

$16,800

Explanation:

Calculation to determine The amount of cost that should be allocated to the Chemistry Department is

First step is to calculate the Cost to be allocated

Cost to be allocated = $43,000 + $4,500 + $36,500

Cost to be allocated= $84,000

Second step is to calculate the Allocation base

Allocation base = 500 + 200 + 300

Allocation base = 1,000 total students

Third step is to calculate the Allocation rate using this formula

Allocation rate = Cost to be allocated ÷

Allocation base

Let plug in the formula

Allocation rate= $84,000 ÷ 1,000

Allocation rate = $84 per student

Now let calculate the Allocation to Chemistry Department

Allocation to Chemistry Department = $84 per student x 200

Allocation to Chemistry Department = $16,800

Therefore The amount of cost that should be allocated to the Chemistry Department is $16,800

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