Tenet Engineering, Inc. operates two user divisions as separate cost objects. To determine the costs of each division, the company allocates common costs to the divisions. During the past month, the following common costs were incurred:Computer services (85% fixed)$260,000 Building occupancy 600,000 Personnel costs 110,000 Total common costs$970,000 The following information is available concerning various activity measures and service usages by each of the divisions: Division A Division BArea occupied (square feet) 20,000 40,000 Payroll$380,000 $180,000 Computer time (hours) 200 220 Computer storage (megabytes) 4,050 -0- Equipment value$200,000 $250,000 Operating profit (pre-allocations)$555,000 $495,000 Using the most appropriate allocation
basis, what is the personnel cost allocated to Division A (rounded to the nearest whole dollar)?
A. $58,143.
B. $76,463.
C. $110,000.
D. $74,643.
Answer: D
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