Logan Corporation has 30 employees, 10 in "A-line," and 20 in "B-line." Logan incurred $180,000 in fringe benefits costs last year. How much in fringe benefit costs should be allocated to "A-line"?

a. $ 60,000

b. $120,000

c. $180,000

d. $ 90,000

d. $ 3,000

The correct answer is A.

Explanation:

Giving the following information:

Logan Corporation has 30 employees, 10 in "A-line," and 20 in "B-line." Logan incurred $180,000 in fringe benefits costs last year.

First, we need to calculate the allocation rate based on number of employees:

Estimated allocation rate = total estimated fringe costs for the period / total amount of allocation base

Estimated allocation rate = 180,000/30 = $6,000 per employee.

Now, we can allocate fringe costs to the A-line:

Allocated fringe costs = Estimated Estimated allocation rate * Actual amount of allocation base

Allocated fringe costs = 6,000*10 = $60,000