The Kelsey Manufacturing Company Ltd has two production departments (Assembly an

Question

The Kelsey Manufacturing Company Ltd has two production departments (Assembly and Finishing) and two support departments (Janitorial and Personnel). The usage of the two support departments in 2012 is as follows User of Support Personnel Janitorial Assembly Finishing Personnel Janitorial 5% 10% 60% 30% 40% 55% The budgeted costs in the support departments of 2012 were as follows $90 000 $50 000 Personnel Janitorial Using the direct method, what is the Personnel Department cost allocated to the Assembly Department? A. $60 000 B. $54 000 C. $21 053 D. $78 842

Explanation / Answer

Using direct method cost allocation :

so answer is a) $60,000

Assembly Finishing Personnel 60000 30000 Janitorial 21053 28947 Total 81053 58947

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