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SARCO has two separate producing departments called Grinding and Assembly. It has two support departments,...

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Accounting

SARCO has two separate producing departments called Grinding and Assembly. It has two support departments, Power and Maintenance. SARCO has decided to allocate Power department costs based on the Kilowatt-hours and Maintenance costs based on the Maintenance hours. Given the information below, use the direct method to allocate support department costs.

Support Department

Producing Department

Power

Maintenance

Grinding

Assembly

Direct Costs

$250,000

$160,000

$100,000

$60,000

Kilowatt-hours

--

--

0.75

0.25

Maintenance hours

--

--

0.05

0.05

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