Question Details

Which cost estimation method is being used by Auric Company


At the Auric Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.
	
	Total personnel department costs are $287,500.

	Department	A	B	C
	Number of employees	70	280	225
	Number of new hires	25	13	12

1) If the number of employees is considered the cost driver, what amount of personnel costs will be allocated to Department A? 
A) $35,000 
B) $10,667 
C) $140,000 
D) $43,700 


2) If the number of new hires is considered the cost driver, what amount of personnel costs will be allocated to Department A? 
A) $35,000 
B) $10,667 
C) $143,750 
D) $43,700 


3) Which cost estimation method is being used by Auric Company? 
A) the simple regression method 
B) the conference method 
C) the account analysis method 
D) the marginal costing method 




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help