21 Bunyan Company produces camping gear. The company's main production departments are Molding and...
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Bunyan Company produces camping gear. The company's main production departments are Molding and Finishing. Production of the camping gear cannot be accomplished without the supporting tasks of Materials Management and meals for production employees provided by the Cafeteria. Cafeteria costs are always higher than Materials Management costs. The company believes that the number of employees in each department is the best driver of Cafeteria costs. The number of employees in each department is as follows: Molding Department, 27; Finishing Department, 30; Materials Management Department, 3; and Cafeteria Department, 6. The company also believes that the value of support materials used in each department is the best driver for Materials Management costs. The support materials used in the Molding and Finishing departments are valued at $1,800 and $2,700, respectively. Using the sequential method for support department cost allocation (allocating Cafeteria costs first), the percentage of Cafeteria costs that should be allocated to the Molding Department is A) 15% B) 30% C) 45% D) 60% E) none of the above
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