Using the direct method, what amount of Maintenance Department costs will be allocated to ...
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Accounting
Using the direct method, what amount of Maintenance Department costs will be allocated to
Department B?
Bev's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $40,000 are allocated based on the number of employees. The costs of operating departments A and B are $80,000 and $120,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Production Departments A B Support Departments Maintenance Personnel Department Department $160,000 $40,000 NA 400 20 NA Budgeted costs Budgeted maintenance-hours Number of employees $80,000 $120,000 480 320 80 240
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