Question

Canfield Technical School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of the classrooms. Based on the information below, what is the total amount of administrative cost to the Accounting Department (rounded to the nearest dollar) if administrative costs for the school were $50,000, maintenance fees were $12,000, and utilities were $6,000?Department Students ClassroomsElectrical 120 10,000 sq. ft.Welding 70 12,000 sq. ft.Accounting 50 8,000 sq. ft.Carpentry 40 6,000 sq. ft.Total 280 36,000 sq. ft.$8,929.$17,000.$18,500.$22,667.$11,111.

Answer 1

The total amount of administrative cost to the Accounting Department is $ 14,900.

Step-by-step explanation:

In order to calculate the total amount of administrative cost to the Accounting Department, first we need to calculate the Utilization Ratio of the particulars, using the following formua:

Utilization Ratio=(Total amount particular/Utilised by accounting department)

Hence, the Utilization Ratio of Administration costs =(50/280)

=0.178

the Utilization Ratio of Maintenance fee =(12,000/36,000)=0.33

the Utilization Ratio of Utilities=(12,000/36,000)=0.33

Therefore, the total amount of administrative cost to the Accounting Department=(0.178×$50,000)+(0.33×$12,000)+(0.33×$6,000)

=$8,900+$4,000+$2,000

=$14,900