Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 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 $184,000 and $276,000, 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 |
$320,000 |
$140,000 |
$184,000 |
$276,000 |
Budgeted
maintenance−hours |
NA |
900 |
1,300 |
670 |
Number of employees |
75 |
NA |
210 |
680 |
Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
A. $74,704
B. $93,868
C. $156,447
D. $108,832
Maintenance department costs allocated to department B = (320,000/1300+670) * 670 = 108,832 Option D is the answer Comment if you face any issues |
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Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated...
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