University Printers has two service departments (Maintenance and Personnel) and
ID: 2571558 • Letter: U
Question
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.
Required:
Use the step method to allocate these service department costs to the operating departments, allocate from Maintenance first.
Total Cost Printing ___________________
Total Cost Developing _________________
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current period:
Required:
Use the step method to allocate these service department costs to the operating departments, allocate from Maintenance first.
Service Departments Production Departments Printing Maintenance Personnel Developin Total Direct Costs 40,000$ 20,000 $ 40,000 $ 20,000 $ 120,000 Machine Hours Labor Hours 3,000 1,000 1,000 3,000 2,000 6,000 5,000 1,000Explanation / Answer
Use the step method to allocate these service department costs to the operating departments, allocate from Maintenance first.
Maintenance Personnel Printing Developing Total Direct cost 40000 20000 40000 20000 120000 Allocation of maintenance department cost (40000) 13333 20000 6667 0 Allocation of personnel department cost (33333) 8333 25000 0 Total 0 0 68333 51667 120000Related Questions
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