Question

Frederick Company has two service departments (Cafeteria Services & Maintenance). Frederick has two production departments (Assembly...

Frederick Company has two service departments (Cafeteria Services & Maintenance). Frederick has two production departments (Assembly Department & Packaging Department.) Frederick uses a step allocation method where Cafeteria Services is allocated to all departments and Maintenance Services is allocated to the production departments. All allocations are based on total employees. Cafeteria Services has costs of $295,000 and Maintenance has costs of $175,000 before any allocations. What amount of Maintenance total cost is allocated to the Packaging Department? (round to closest whole dollar) Employees are:

            Cafeteria Services    3

            Maintenance     3

Assembly Department 9

Packaging Department 9

0 0
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Answer #1

Allocation

Cafeteria Maintenance Assembly Packaging
Cost 295000 175000
Allocation of cafeteria -295000 42143 126429 126428
Allocation of maintenance -217143 108571.5 108571.50

Maintenance cost allocated to Packaging = 108571.50 0r $108572

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