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: (based on number of employees)
Using the reciprocal method, the total costs allocated to the three operating departments from the support departments is:

A) $66,000
B) $84,000
C) $59,368
D) $60,000