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		—			1,500			1,500			2,700
Labor-hours		800			—			800			2,400
Department direct costs	$	3,800		$	13,800		$	15,500		$	12,000

Required:

Allocate the service department costs using the step method, starting with the Maintenance Department. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

	maintenance	personnel	printing	developing
service department costs
maintenance
personnel
total costs allocated

Answer 1