The following data apply to questions 6-8. Zeta Company budgets the following amounts for its Buildings & Grounds and Computer Services Departments in servicing each other and the two manufacturing divisions of Signs and Mailers: Used By Supplied By Building & Grounds Computer Services Signs Mailers Buildings & Grounds 0.20 0.60 0.20 Computer Services 0.15 0.30 0.55 The actual results for the time period were as follows: Used By Supplied By Building & Grounds Computer Services Signs Mailers Buildings & Grounds 0.10 0.60 0.30 Computer Services 0.25 0.350.40 Fixed Variable Buildings & Grounds $ 50,000 $90,000 Computer Services $100,000 $21,000 6. Total fixed costs allocated from Buildings & Grounds to the Signs Department, using the preferred allocation basis, by the direct allocation method are a. $25,000. b. $30,000. c. $33,333. d. $37,500. 7. Total variable costs allocated from Computer Services to Mailers Department, using the preferred allocation basis, by the step-down allocation method (begin with Building & Grounds) are a. $16,000. b. $12,000. c. $25,235. d. $8,400. 8. The equation to determine the total variable costs of Computer Services using the preferred allocation basis, for the reciprocal allocation method is a. CS = $21,000+ 0.15 B&G. c. CS = $21,000+ 0.10 B&G. b. CS = $21,000+ 0.25 B&G. d. CS = $21,000+ 0.20 B&G.
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