How much the accounting department costs


Question: Sasha Company allocates the estimated $180,400 of its accounting department costs to its production and sales departments since the accounting department supports the other two departments particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Information regarding costs and employees follows:

Department

Employees

Accounting

4

Production

40

Sales

13

Required: How much of the accounting department costs will be allocated to the production?

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