Question

Logan Corporation has 100 employees, 30 in "A-line," and 70 in "B-line." Logan incurred $280,000 in fringe benefits costs last year. How much in fringe benefit costs should be allocated to "A-line"?

Answer 1

To allocate fringe benefits costs to A-line at Logan Corporation, a proportional distribution based on the number of employees is used, resulting in $84,000 being allocated to A-line.

Step-by-step explanation:

To allocate the fringe benefits costs to A-line at Logan Corporation, we need to use a simple proportional distribution method based on the number of employees in each line. The company has 100 employees, with 30 in A-line and 70 in B-line, incurring a total of $280,000 in fringe benefits costs last year.

Step-by-Step Allocation:

1. Calculate the total number of employees: 100 (30 A-line + 70 B-line).
2. Determine the proportion of A-line employees: 30/100 = 0.3 (30%).
3. Multiply the total fringe benefits costs by the A-line proportion: 0.3 * $280,000 = $84,000.

Therefore, the amount of fringe benefits costs allocated to A-line is $84,000.