University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and...
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Accounting
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:
Maintenance
Personnel
Printing
Developing
Machine-hours
1,700
1,700
5,100
Labor-hours
500
500
3,500
Department direct costs
$
3,000
$
13,000
$
14,100
$
11,200
Required:
Use the direct method to allocate these service department costs to the operating departments.
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