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.

The following data appear in the company records for the current period:

	Maintenance			Personnel			Printing			Developing
Machine-hours		—			1,100			1,100			3,300
Labor-hours		550			—			550			2,200
Department direct costs	$	5,800		$	15,800		$	17,100		$	14,500

Required:

Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

	Maintenance Personnel Printing Developing Service department costs Maintenance allocation Personnel allocation Total costs allocated $0 $0 $0 $0

Answer 1

Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

	Maintenance Personnel Printing Developing Service department costs 5800 15800 Maintenance allocation -5800 1450 4350 Personnel allocation -15800 3160 12640 Total costs allocated $0 $0 4610 16990