Hanung| Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $100,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Maintenance department has 50 employees. • • Personnel department has 800 budgeted maintenance hours. • • Production department A has 200 employees and 1200 budgeted maintenance hours. Production department B has 600 employees and 600 budgeted maintenance hours. 1. Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? 2. Using the direct method, what amount of Personnel Department costs will be allocated to Department B? 3. Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B assuming the maintenance department is allocated first (of the two service departments)? 4. Using the direct method, what amount of Personnel Department costs will be allocated to Department A?
Hanung| Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $100,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Maintenance department has 50 employees. • • Personnel department has 800 budgeted maintenance hours. • • Production department A has 200 employees and 1200 budgeted maintenance hours. Production department B has 600 employees and 600 budgeted maintenance hours. 1. Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? 2. Using the direct method, what amount of Personnel Department costs will be allocated to Department B? 3. Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B assuming the maintenance department is allocated first (of the two service departments)? 4. Using the direct method, what amount of Personnel Department costs will be allocated to Department A?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Hanung| Corp has two service departments, Maintenance and Personnel. Maintenance
Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours.
Personnel Department costs of $100,000 are allocated based on the number of employees. The
costs of operating departments A and B are $160,000 and $240,000, respectively. Data on
budgeted maintenance-hours and number of employees are as follows:
Maintenance department has 50 employees.
•
•
Personnel department has 800 budgeted maintenance hours.
•
•
Production department A has 200 employees and 1200 budgeted maintenance hours.
Production department B has 600 employees and 600 budgeted maintenance hours.
1. Using the direct method, what amount of Maintenance Department costs will be allocated to
Department B?
2. Using the direct method, what amount of Personnel Department costs will be allocated to
Department B?
3. Using the step-down method, what amount of Maintenance Department cost will be allocated
to Department B assuming the maintenance department is allocated first (of the two service
departments)?
4. Using the direct method, what amount of Personnel Department costs will be allocated to
Department A?
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