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Staff Company assigns Building Dept (BD) cost to line depts (P1 and P2) using floor...

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Accounting

Staff Company assigns Building Dept (BD) cost to line depts (P1 and P2) using floor space as the cost driver and it assigns Personnel Dept (PD) costs with number of employees as the cost driver. Plan data for the four depts is shown below. If Staff Company uses the direct method, the VC rate for building costs is closest to?

BD PD P1 P2 floor space (000s) 20 10 120 70 Employees 6 10 80 50 total VC (000s) $100 $150 $180 $240

A. $.8

B. $.45

C $.53

D $.68

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