ABC Company is exploring ways to allocate the cost of service departments such as Quality Control and Maintenance to the production department such as Machining and Assembly. The controller of the company has provided the following information: Quality Control Maintenance Machining Assembly Total Budgeted overhead costs before allocation P350,000 P200,000 P400,000 P300,000 P1,250,000 Budgeted machine hours - - 50,000 hours - 50,000 hours Budgeted direct labor hours - - - 25,000 hours 25,000 hours Budgeted hours of service of quality control - 7,000 hours 21,000 hours 7,000 hours 35,000 hours Budgeted hours of service of maintenance 10,000 hours - 18,000 hours 12,000 hours 40,000 hours Under the step-down method of allocating service department costs from quality control to maintenance, what is the total service cost allocated to the assembly departmen
ABC Company is exploring ways to allocate the cost of service departments such as Quality Control and Maintenance to the production department such as Machining and Assembly. The controller of the company has provided the following information:
|
|
Quality Control |
Maintenance |
Machining |
Assembly |
Total |
|
Budgeted |
P350,000 |
P200,000 |
P400,000 |
P300,000 |
P1,250,000 |
|
Budgeted machine hours |
- |
- |
50,000 hours |
- |
50,000 hours |
|
Budgeted direct labor hours |
- |
- |
- |
25,000 hours |
25,000 hours |
|
Budgeted hours of service of quality control |
- |
7,000 hours |
21,000 hours |
7,000 hours |
35,000 hours |
|
Budgeted hours of service of maintenance |
10,000 hours |
- |
18,000 hours |
12,000 hours |
40,000 hours |
Under the step-down method of allocating service department costs from quality control to maintenance, what is the total service cost allocated to the assembly department?
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