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University Printers has two service dpeartments (Maintenance and Personnel) and two operating departments (Printing and...

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Accounting

University Printers has two service dpeartments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance cost on the basis of machine-hours in each department and personnel cost on the basis of labor-hours worked by the emploees in each. The following data appear in the company records for the currect period:

Maintenance Personnel Printing Developing
Machine-hours - 1,000 1,000 3,000
Labor Hours 500 - 500 2,000
Department Direct Cost 5,000 12,000 15,000 10,000

Use the direct method to allocate these service department costs to the operating departments.

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