Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are alloca...
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance−hours. Personnel Department costs of $150,000 are allocated based on the number of employees. The costs of operating departments A and B are $204,000 and $306,000, respectively. Data on budgeted maintenance−hours and number of employees are as follows:
|
Support Departments |
Production Departments |
|||
|
Maintenance Department |
Personnel Department |
A |
B |
|
|
Budgeted costs |
$360,000 |
$150,000 |
$204,000 |
$306,000 |
| Budgeted
maintenance−hours |
NA |
860 |
1,200 |
620 |
|
Number of employees |
70 |
NA |
280 |
700 |
Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
A. $122,637
B. $104,242
C. $83,284
D. $ 173,736
Homework Answers
| Correct option is: a. $122,637 | |||
| Workings: | |||
| Department A | Department B | Total | |
| Maintenance hours (a) | 1,200 | 620 | 1,820 |
| Allocated Maintenance Budgeted cost | $ 2,37,363 | $ 1,22,637 | $ 3,60,000 |
| ($360000/1820)*(a) | |||
Add Answer to:
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are alloca...
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Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $360,000 are allocated on the basis of budgeted maintenance−hours. Personnel Department costs of $140,000 are allocated based on the number of employees. The costs of operating departments A and B are $200,000 and $300,000, respectively. Data on budgeted maintenance−hours and number of employees are as follows: Support Departments Production Departments Maintenance Department Personnel Department A B Budgeted costs $360,000 $140,000 $200,000 $300,000 Budgeted maintenance−hours NA 860 1,210...
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