Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $200,000 are allocated based on the number of employees. The costs of operating departments A and B are $228,000 and $342,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Budgeted costs Budgeled Support Departments Personnel Department $200,000 860 maintenance-hours 75 NA 260 Number of employees 640 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) OA. $89,455 OB. $240,794 OC. $148,381 OD. $185,491 Production Departments Maintenance Department $370,000 NA B $228,000 $342,000 1,230 660 A
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $200,000 are allocated based on the number of employees. The costs of operating departments A and B are $228,000 and $342,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Budgeted costs Budgeled Support Departments Personnel Department $200,000 860 maintenance-hours 75 NA 260 Number of employees 640 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) OA. $89,455 OB. $240,794 OC. $148,381 OD. $185,491 Production Departments Maintenance Department $370,000 NA B $228,000 $342,000 1,230 660 A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $200,000 are allocated based on the number of employees. The costs
of operating departments A and B are $228,000 and $342,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Support Departments
Personnel
Department
$200,000
860
maintenance-hours
Number of employees
NA
Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.)
Budgeted costs
Budgeled
OA. $89,455
OB. $240,794
OC. $148,381
D. $165,491
Maintenance
Department
$370,000
NA
Production
Departments
75
A
B
$228,000 $342,000
1,230
680
260
640
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