If the company uses the direct method of service department cost distribution, how much will the Machinery Department apply as factory overhead if it uses 13,500 direct labor hours? Jeang Corporation has two service departments and three producing departments. The following were gathered from theeir operations: Service Departments Maintenance P500,000 Storeroom 540,000 Producing Departments Machinery 1,200,000 Assembly 1,784,000 Packaging 872,000 A factory survey revealed the following: Departments Maintenance Service Number of Requisitions Direct Labor Hours Maintenance - 400 Storeroom 14% - Machinery 32% 3,500 20,000 Assembly 26% 6,000 36,000 Packaging 28% 4,100 18,000 The costs of the maintenance department are allocated on the basis of percent of services rendered while the costs of the Storeroom department are allocated on number of requisitions.
If the company uses the direct method of service department cost distribution, how much will the Machinery Department apply as factory
Jeang Corporation has two service departments and three producing departments. The following were gathered from theeir operations:
Service Departments
Maintenance P500,000
Storeroom 540,000
Producing Departments
Machinery 1,200,000
Assembly 1,784,000
Packaging 872,000
A factory survey revealed the following:
Departments Maintenance Service Number of Requisitions Direct Labor Hours
Maintenance - 400
Storeroom 14% -
Machinery 32% 3,500 20,000
Assembly 26% 6,000 36,000
Packaging 28% 4,100 18,000
The costs of the maintenance department are allocated on the basis of percent of services rendered while the costs of the Storeroom department are allocated on number of requisitions.
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