The Accountants for Elliot, Inc

Multiple Choice

The accountants for Elliot, Inc. are preparing the operating departments overhead budgets. The Maintenance department direct costs are $12,000, and the Administration department direct costs are $54,000. The following data have been collected about use of services: Use the reciprocal method. The cost of Administration department after support cost allocations but before allocation to the operating departments is:

A) $58,800
B) $60,800
C) $60,000
D) $59,368